2006

2006 Annual Report: Global Imbalances: As Giants Evolve
The world has been confronting unusually large current account imbalances for so long now that international policy makers have almost stopped warning that these represent a major risk to the world economic outlook.

The essay featured in the 2006 annual report summarizes presentations and discussion at the 51st economic conference of the Federal Reserve Bank of Boston, Global Imbalances − As Giants Evolve, which was held in June 2006.

2005

2005 Annual Report: U.S. Health Care Reform: Difficult Trade-Offs
Why has health care become a major challenge to the U.S. economy and to economic policymakers?

The essay in the 2005 annual report summarizes the themes and consensus-based prescriptions for action that emerged from the Boston Fed's 50th economic conference, Wanting It All: The Challenge of Reforming the U.S. Health Care System, held in June 2005.

2004

2004 Annual Report: Living Beyond Our Means
Individuals and families are very familiar with what “living beyond our means” can involve. It can be fun for a short while, but a family that consistently spends more than it earns will deplete its savings and build up increasing amounts of debt. And families cannot live beyond their means forever – at some point, lenders will start charging increasingly higher interest rates on the family’s borrowing and eventually stop making new loans altogether. At that point, family members will find they cannot spend what they earn on things they need – interest charges and eventual repayment of the principal will cut into their spending, leading to a reduced standard of living.

2003

2003 Annual Report: Embracing Change
Over its entire history, the Federal Reserve Bank of Boston has faced changes in the economy, in the financial services industry, and in its responsibilities. At times, we’ve reacted to change; at times, the Bank has served as a catalyst, as our staff have explored new ways to accomplish the tasks facing us. The Bank’s mission has remained the same over the years—to support sound economic growth and financial stability in New England and the nation. But the ways in which we fulfill our mission and meet our changing responsibilities have evolved. Philosophers tell us that change is the only constant, but its pace is hardly constant. At present, it seems to be accelerating.

2002

2002 Annual Report: Education Reform in New England
When the term “knowledge- based economy” first entered popular discussion — sometime around the early 1980s — the focus was exclusively on scientific, technological, and business leadership. Only gradually did our society come to appreciate the pervasiveness of the knowledge-based economy. It affects not just the demand for high-level technical and entrepreneurial talent but, indeed, the job requirements for virtually all types of work. This growing realization has laid the foundation for broad - scale reforms of education in the United States and many other nations.

2001

2001 Annual Report: Building Communities ... Making a Difference
One of the most vexing economic problems facing the United States has been the persistence of pockets of poverty in the midst of prosperity. The reasons for this are many and complex. Prominent among them are economic isolation in the case of rural areas, and language and cultural barriers in the case of many inner-city communities. Discrimination has played a role, but so too has simple ignorance. Resources and opportunities exist in these communities, but getting the recognition from market sources necessary to leverage these assets is difficult. For whatever reason, human and physical resources in these neighborhoods may not be fully utilized. Perhaps even worse, exclusion from the economic mainstream perpetuates and reinforces itself. Lacking jobs, capital, and examples of success, many of these communities have remained mired in poverty.

2000

2000 Annual Report: The U.S. Retail Payments System...Dawn of a New Era
Many people are unaware that there is something called a “payments system”. They only know that they can go anywhere in the United States or the world, pay for an item with something other than cash, have that payment accepted, and have the amount deducted from their account or added to their credit balance with ease. The payments system that makes this complicated process seem easy is a network of institutions, law, and technology that combine to enable consumers and businesses to exchange monetary value. Payments range from the small and simple — fifty cents at a newsstand for the morning paper — to the large and complex — a bank transfers $500 million electronically to multiple banks in the U.S. and overseas.

1999

1999 Annual Report: Productivity Growth & The “New Economy”
By almost any measure these have been good economic times. In 1999, U.S. economic growth averaged more than 4 percent for the third consecutive year. The unemployment rate fell to a 30-year low. Inflation averaged just over 2 percent. And real incomes increased. Even those at the bottom of the income distribution seem to be making gains, after years of stagnation. For some time, “it doesn't get much better than this” has been on everyone's lips. Is this rosy picture just an unusually long upswing in the business cycle? Or is a “New Economy” truly emerging?

1998

1998 Annual Report: Sharing the Fruits of Growth
Over the past several years, the United States has enjoyed the most favorable macroeconomic conditions in more than three decades—to some, the definition of “as good as it gets.” Unemployment has been low, growth has been above expectations of what the U.S. economy could sustain over such a long period, and inflation has declined to a very low rate of growth. But one feature of today’s economy stands in marked contrast with the earlier years. In the 1960s, the incomes of all those involved in the economy were much more narrowly spread than is the case today. Whether one examines the wages and salaries of workers or the total incomes of families and households, income inequality, that is, the difference in income between those at the upper and lower ends of the income distribution, has increased markedly. To some, perhaps, the definition of an economic problem.

1997

1996

1995

1994

1993

1992

1991

1991 Annual Report: The Procyclical Application of Bank Capital Requirements
Capital requirements have long been considered important to bank safety and the protection of the federal deposit insurance fund. But widespread banking problems and heavy losses to the deposit insurance fund have intense the focus on capital. Supervisory agencies have become even more rigorous in applying and enforcing capital standards, imposing higher requirements on damaged banks. Furthermore, capital requirements have taken on greater significance as a result of a key provision of the recently enacted banking legislation, the Federal Deposit Insurance Corporation Improvement Act of 1991, which links various supervisory actions to deteriorating capital ratios in troubled institutions.

1990

1990 Annual Report
1990 was an exceptionally difficult year, as regional economic problems were exacerbated by a national recession. The change came with startling swiftness; only two years ago New England’s prosperity was the envy of the country. Yet 1990 saw widespread layoffs, rising unemployment rates, bankruptcies and foreclosures, and ballooning state government deficits; no sector escaped the recession’s touch.

1989