In The Regional Economist: Aging and the Economy, Millennials Moving Back Home and More

ST. LOUIS – A new issue of The Regional Economist, the Federal Reserve Bank of St. Louis’ quarterly review of regional, national and international economic issues of the day, has been posted online at https://www.stlouisfed.org/publications/regional-economist/october-2015.  

The articles include:

President’s Message: James Bullard discusses some considerations for dividend payments to Fed member banks.

Aging and the Economy: Lessons from Japan:  Because of its unusually high percentage of older people, Japan is heavily analyzed by other developed economies for the impact of aging on a macroeconomy. Does a large older population affect such things as output, inflation and labor force participation?

What’s Driving Millennials To Move Back Home?  In the District served by the St. Louis Fed, about 40 percent of 25-year-olds were back living with their parents in 2013. That’s higher than in 1999. Both numbers were even higher for the country as a whole. The return to “the nest” varies, depending perhaps on such things as the labor market, the housing market and student debt in each locale.

Few Developing Countries Escape Income Trap:  Despite the theory of global economic convergence, few developing countries have actually been able to catch up to the income levels in the U.S. or other advanced economies. They remain trapped at a relatively low- or middle-income level.

Postrecession Recovery Varies around the World:  Since 2009, percentage growth in GDP has been the highest in Asia and Africa and the lowest in Europe, followed by North America. The mediocre performance on the latter two continents could have something to do with their advanced and open financial systems, which might have made it easier for the global financial crisis to spread through them.

The Composition of Long-term Unemployment Is Changing toward Older Workers:  The Great Recession has been officially over for more than six years, but the rate of long-term unemployment (26 weeks or longer) remains elevated.  Two age groups have been hurt the most: those 25-44 and, even more so, those 55 and older.

 Commuters Spread Stimulus Spending:  The federal stimulus spending in one county increased employment and wage payments two to three counties away, the authors found in a study of the American Recovery and Reinvestment Act of 2009. The spending spilled over as long as the geographic areas were sufficiently connected, as measured by commuting patterns.

Growth Is Resilient in Midst of Uncertainty: Despite the volatility in financial markets late this summer, the U.S. economy has continued to expand at a moderate pace.

In Northeast Arkansas, Jonesboro Is Thriving: Once a slow-growing agricultural area, the Jonesboro MSA is changing so fast that some parts are hardly recognizable from what they were just two or three years ago. Employment is up 13 percent from before the recession. Housing prices were stable even when the rest of the country was seeing a crash. Manufacturing is growing.