For the second time in the economic recovery, U.S. inflation is approaching 1 percent. While weak lending may still be the culprit behind low inflation, monetary aggregates may no longer closely track credit conditions. Both money and credit play a role in determining economic output and prices, but securitization has decoupled the link between money and credit in the United States.  So what does this mean for policymakers?

The average life cycle earnings profile for college graduates of more-recent birth cohorts increased at a slower rate than that of cohorts who entered the workforce many decades ago. Continue reading to find out why and to discover the theoretical link between a measure of ability and the life cycle earnings profile.

The financial crisis and Great Recession had profound effects not only on the U.S. economy as a whole, but also on individual households.   In our new annual report, find out more about the link between households’ balance sheets (their savings, assets, debts and net worth, as distinct from wages and income) and the overall performance of the U.S. economy, and why it’s important not just for individual families but the economy as a whole for those balance sheets to get back on track.  This essay, “After the Fall: Rebuilding Family Balance Sheets, Rebuilding the Economy,” is also the subject of a short video.

Agricultural banks in the area served by the Federal Reserve Bank of St. Louis said in a new survey that farm income generally increased in the first quarter compared with the same period a year earlier.  Prices on quality land are down a bit, though, from the fourth quarter. Loan demand has been soft, probably due in part to high commodity prices and record crop insurance payments. Read more about ag credit conditions in the new issue of Agricultural Finance Monitor.

A new study from the Federal Reserve Bank of St. Louis shows a surprising number of the nation's community banks not only survived the financial crisis—they thrived. "The Future of Community Banks: Lessons from Banks that Thrived during the Recent Financial Crisis" shows community banks that maintained certain standards and qualities were able to consistently deliver strong performances while others merely survived or failed during the crisis.

When the U.S. housing bubble burst in 2006, prices were 5 to 6 times annual income. In China today, housing prices are 11 times income – and as high as 23 times income in major cities. Rapid price growth, large price-to-income ratios, and high vacancy rates (between 25 and 30 percent) suggest the possibility of a bubble. A collapse would prolong the worldwide recession, it is feared.  In this short essay, find out more about the housing market in China and how it compares with that in the U.S.

How does one measure the total value of all the goods and services produced in a country’s economy? Gross domestic product (GDP) is one common and fairly comprehensive measure. This month’s Page One Economics newsletter explains how GDP is calculated. This short article also examines what GDP does not measure (think "underground economy") and acknowledges that GDP was never intended to be a measurement of overall well-being.

In the latest article from the Economic Synopses series, a significant number of industries—representing roughly a quarter of the U.S. economy—conducted business as usual during the most recent recession when judged by pre-recession trends. For a slightly larger group of industries, mostly related to construction, manufacturing and trade, the contractions have been severe, reinforcing a preexisting process of steady relative decline.

A Financial Accounting Standards Board (FASB) proposal would change the way financial institutions set aside funds to cover losses on loans, debt securities and other assets.  Read about the proposal in the latest Central Banker, our quarterly publication for bankers in the Eighth District.

Student loan debt increased significantly over the past few years, almost doubling from half a trillion dollars in 2007 to nearly $1 trillion today.  And in the third quarter of 2012, the share of delinquent student loan balances exceeded the share of delinquent credit card balances.  Explore the reasons why in the latest Inside the Vault.

U.S. citizens lost about 3.3 percent of their income since the start of the Great Recession. But that's an average for the country. Nevada lost more than 14 percent, while North Carolina actually gained over 15 percent. Real per capita GDP and house prices also fluctuated from state to state, sometimes substantially. Find out more about the status of the states' economies in this latest installment in our Economic Synopses series.

Has the competitive balance tilted away from banks and toward credit unions, given the latter’s tax exemption and more-recent ability to draw members from wider pools? Find out in the April issue of The Regional Economist.  Other main articles present "a view from the fiscal cliff," delve into fraud in the unemployment insurance system in this country and examine why low interest rates have yet to spur job growth.

In the latest issue of Review, the St. Louis Fed's bimonthly research journal, see what our economists and others are writing about. Christopher Waller, our research director, is the co-author of an article on optimal monetary stabilization policy. Another article examines the effect of the intertemporal discount rate on the tax burden of different generations. The third article focuses on the distinguishing features of community banks that thrived during the recent financial crisis.

The total volume of loans held by community banks peaked in 2008, dropped during the financial crisis and Great Recession, and bottomed out in 2011.  By December 2012, they recovered only to a level roughly 10 percent below their 2008 peak.  Learn why in the new Central Banker, which also looks at the FASB’s proposal for loan loss accounting and explores the global battle over central bank independence.

From tracking gross domestic product (GDP) leading up to and during financial crises in the United States, Canada, the United Kingdom, France and Germany, there appears to be a strong negative correlation between growth rates and the severity of the recent crisis.  Also, the experiences of the United Kingdom, France and Germany suggest that monetary policy may not have been a main driver of their respective recoveries.

The economy has increased its demand for high-skilled (high-wage) workers and low-skilled (low-wage) workers, while opportunities for middle-skilled (middle-wage) jobs have declined, largely because of the automation of routine work.  This "job polarization" may require a shift in the sort of training that is encouraged for American workers.  Find out more in The Regional Economist.

Money market mutual funds (MMMFs) were subject to some modest regulatory changes in 2010, but many observers argue that the industry is in need of a more substantial overhaul. The $2.9 trillion MMMF industry is objecting, pointing out that the effects of the 2010 reform should be thoroughly examined before further changes are adopted and that radical changes would threaten the industry's survival.  Read more in Central Banker.

In light of recent financial crises, an argument could be made that financial liberalization seems to lead to increased volatility.  However, the authors of an updated working paper from the St. Louis Fed have found that countries with better developed financial markets tend to have significantly lower aggregate volatility. Development that promotes better credit allocation under more-relaxed borrowing constraints can reduce the impact of, at least,  nonfinancial shocks (from government spending, etc.) on aggregate output and investment, the authors show.

The Great Recession took a huge toll on the construction sector. However, the numbers might be even larger than estimated. When factoring in the ripple effect on related sectors (materials, furniture, banks, etc.), the downturn in construction could account for a third of the total decline in gross output and about half the decline in employment. Read more in this new installment in our Economic Synopses series.