St. Louis Fed's The Regional Economist: Extra Credit: The Rise of Short-Term Liabilities; Neighborhoods That Don't Work; Which Came First - Democracy or Growth?; Community Profile: Louisiana, Mo.

ST. LOUIS — The April 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: www.stlouisfed.org/publications/re/default.cfm.

• "Extra Credit: The Rise of Short-Term Liabilities." The average American is carrying more debt than ever. Between 1989 and 2004, the median value of debt among families more than doubled, likely in part due to the increased use of credit cards and payday loans. Researcher Kristie M. Engemann and economist Michael T. Owyang analyze the patterns of consumer debt and find this steep rise in short-term liabilities may have a long-term impact on the U.S. economy.
• Neighborhoods That Don't Work." Some neighborhoods tend to be populated by people with high incomes and high levels of education, while others tend to reflect residents who are substantially less well-off. Economists and sociologists have long argued that this matters because the characteristics of a person's residential area greatly influence his or her economic outcomes. Researcher Allison Rodean and economist Christopher H. Wheeler look at some of the explanations for why those who are unemployed are becoming more concentrated in certain neighborhoods, and analyze some possible solutions.
• "Which Came First - Democracy or Growth?" Most rich countries are democratic and most dictatorships are poor. Most economists would argue that economic freedom promotes growth, but fewer agree that more political freedom (more democracy or political rights) improves economic performance as well. For example, Chile in the 1970s and China today are just two autocracies whose economies performed well. Economist Rubn Hernndez-Murillo and researcher Christopher J. Martinek analyze the link between economic growth and democracy. They suggest that persuading developing nations to embrace democracy may rest on getting them to adopt some fundamental features of Western economic systems, such as free markets and the importance of securing private property.
• "Community Profile: Louisiana, Mo." Some 10 years ago, Louisiana, Mo., was almost a ghost town. Now, a nascent tourism industry and the resurrection of the Stark Bro's as both a nursery and a fulfillment house signal that this community embraces both change and new technology.

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