Recent Analysis and Research

Posted February 23, 2015
Daniel J. Wilson

Economic Letter a Publication of Economic Research

State and local governments frequently offer tax incentives to attract businesses to locate in their area. Proponents view these incentives as a valuable tool to encourage economic development. Critics, on the other hand, argue either that incentives have little effect on business location decisions—and hence are wasteful giveaways—or that their benefits come at the expense of reduced economic activity in other areas. A key element in this debate is distinguishing what is best from a local versus a national perspective.

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Posted February 23, 2015
Andrew K. Rose and Mark M. Spiegel

Working Papers a Publication of Economic Research

We explore the relationship between inflation and the bond market. Bond holders are exposed to capital losses through inflation and represent a potential anti-inflationary force; we ask whether their influence is apparent using a simple theoretical model where bond issuance leads to political pressure on the government to choose a lower inflation rate. We then check empirical data before and after the introduction of a domestic bond market. Inflation-targeting countries with a bond market experience inflation approximately 3-4 percentage points lower than those without one.

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The New Geography of Jobs (EiP)

Posted April 30, 2014

The New Geography of Jobs

In the 1950s, the best indicator of a community's economic success was its level of physical capital. In today's world, the best indicator of a community's economic success is human capital. Professor Enrico Moretti discusses the factors shaping community development and the pivotal role of college-educated workers.

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