ST. LOUIS — The January edition of The Regional Economist, the Federal Reserve Bank of St. Louis' quarterly publication of economic and business issues, features the following articles.(The publication is also available on the Bank's web site: http://stlouisfed.org/publications/re/default.cfm.)
- "Splitsville: The Economics of Unilateral Divorce." After 1970, divorce laws began to change, with many states adopting unilateral divorce. Researcher Kristie M. Engemann and economist Michael T. Owyang look at the economic and social implications of making divorce easier to obtain. Surveying the economic literature, they find studies that suggest unilateral divorce may have led to outcomes such as an increase in the number of mothers in the labor force, a decline in the level of girls' educational attainment, and a reduction in spousal violence.
- "Stable Prices, Stable Economy." Are the Federal Reserve's mandates of maximum employment, stable prices, moderate interest rates and financial stability compatible with one another? St. Louis Fed President William Poole and economist David C. Wheelock analyze two differing views of inflation. One view holds that moderate inflation can help promote full employment, economic growth and stable financial markets. Another camp, building on the work of Nobel Prize winners Milton Friedman and Edmund Phelps, argues that inflationary policies do not boost employment or economic growth in the long run. Poole and Wheelock find that as the empirical evidence mounted, many economists eventually came to embrace the latter view namely, that central banks can best promote high employment, economic growth and financial stability by making price stability the paramount goal of monetary policy.
- "Clearing the Haze: New Evidence on the Economic Impact of Smoking Bans." More and more communities across the country are adopting "smoke-free" laws. Economist Michael R. Pakko looks at the economic studies to date on the impact of these laws, particularly on restaurants and bars, which depend, in part, on patronage by smokers. He found several studies that indicate an overall decline in sales and employment, sometimes significantly, for some restaurants and bars in communities that passed smoke-free laws. While he concedes that the economic effects of smoke-free laws may be difficult to identify and interpret, Pakko suggests that policymakers may want to study the evidence from both public-health professionals and economists.
- "Community Profile: Carbondale, Ill." This community southeast of St. Louis, Mo., runs on three economic cylinders: education, health care and retailing. Education in the form of Southern Illinois University-Carbondale trumps all, most visibly when the university's fans converge on the town for football and basketball games. The university also hopes to capitalize on work being conducted by Midwest Energy Group, which was spun off by the school's chemistry department in 2006 to research biofuels. Scientists at the university also are researching technologies to clean coal and convert it to other fuels.
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