March/April 2006

In This Edition

  • Entrepreneurship and the Policy Environment

    The authors examine how the government-policy environment effects entrepreneurship, specifically if marginal income tax rates and bankruptcy exemptions influence rates of entrepreneurship. Previous work has shown both policies are positively related to entrepreneurship, but these authors show a U-shaped relationship with marginal tax rates and an S-shaped relationship with bankruptcy exemptions.

  • Human Capital Growth in a Cross Section of U.S. Metropolitan Areas

    Growth of human capital (change in the fraction of a metro area's college-educated labor force) is typically seen as generating desirable outcomes (e.g., economic growth). With a sample of >200 U.S. metro areas for 1980, 1990, and 2000, the author explores why some economies have more human capital than others and finds two significant correlates: population and the existing stock of college-educated labor. If population and human capital growth are positively associated with education, these results suggest that larger, more-educated metro areas should have the fastest rates of growth. The evidence supports this conclusion.

  • Macroeconomic News and Real Interest Rates

    Economic news affects the perceptions of investors, forecasters, and policymakers about the economy. The authors evaluate the responses of the yield of 10-year TIIS to nearly 3 dozen macroeconomic announcements and find that the real long-term interest rate responds to surprises in a handful of key macroeconomic indicators (e.g., labor productivity growth).

  • Using Cyclical Regimes of Output Growth to Predict Jobless Recoveries

    Gaps between output and employment growth are often attributed to transitional phases as the economy adjusts to shifts in productivity. But cyclical factors can also drive a wedge between output and employment growth. This article shows that one measure of cyclical dynamics (expected output loss from a recession) helps predict the gap between output and employment growth in the coming 4 quarters and implies that a weaker-than-expected rebound can partially mute employment growth relative to output growth.



Keep up with what’s new and noteworthy at the St. Louis Fed. Sign up now to have this free monthly e-newsletter emailed to you.