“We really needed to help move the needle on educational materials, and so we’re working to provide educators with up-to-date information and quality teaching resources,” says Jane Ihrig, senior advisor and economist in the Program Direction section of Monetary Affairs at the Federal Reserve Board of Governors. Ihrig and Scott Wolla, Fed economic education coordinator, talk with media relations coordinator Shera Dalin about updates educators should make in teaching about new Fed monetary policy tools.

The On the Economy blog will periodically rerun blog posts that were of particular interest. The following post from October looks at the evolving wealth of American retirees.

How has the financial position of U.S. retirees evolved over time?

In a May 2019 analysis, St. Louis Fed Economist and Research Officer YiLi Chien and Research Associate Qiuhan Sun explored that question by comparing the state of current retirees’ household wealth with that of past retirees.

In their Regional Economist article, Better than Ever? The Wealth of Retired Households, the authors examined the balance sheets of households headed by retirees in 2016 with those of households headed by retirees in 2001 and 1989.

They used data available from the Federal Reserve’s Survey of Consumer Finances (SCF).

To gauge how retired households past and present have fared, Chien and Sun looked at the composition of their assets—both financial (e.g., investments) and...

Chien and Bennett used state and local government expenditures data from the Annual Survey of State and Local Government Finances conducted by the Census Bureau to measure state government expenditures and state legislator data from the National Conference of State Legislatures to measure state political leanings.

The survey’s major government expenditure categories include education services, social services and income maintenance, transportation, public safety, and environment and housing.

To compare spending across states, the authors looked at expenditures as a ratio of state gross domestic product (GDP). Additionally, state political leanings were measured as the average proportion of Democratic state legislators (the state Senate and state lower house combined) minus the corresponding share of Republican state legislators from 2009 to 2018. This creates a measurement of state political leanings ranging from -1 (100% Republican leaning) to 1 (100% Democratic...

Child poverty is higher in the Eighth Federal Reserve District than in the rest of the country. Recessions, such as the one caused by COVID-19, increase child poverty and income instability. Changes to the federal child tax credit (CTC) may help reduce the share of children living in poverty.

By Paulina Restrepo-Echavarria, Senior Economist; and Praew Grittayaphong, Research Associate

In 2020, governments around the globe started debt-financed spending to battle COVID-19 and to keep economies afloat. Although fiscal responses to this pandemic varied dramatically among countries, together, they added $24 trillion to global debt according to the Institute of International Finance (IIF).

Debt issuance helps cover the gap between how much a government wants to spend and the revenue it expects to receive that year. When issuing new debt, the government may decide to issue it in a local currency or a foreign currency. Foreign currency borrowing can help some countries attract diverse funding sources, mitigate investor fears of local currency fluctuations and reduce financial frictions. For those reasons, many emerging market economies issue a portion of their debt in U.S. dollars.

The views expressed are those of individual authors and do not necessarily reflect official positions of the Federal Reserve Bank of St. Louis, the Federal Reserve System, or the Board of Governors.

By Doreen Fagan, Manager and Senior Content Editor

Comparing an economy’s actual output with its potential output can provide useful information about the economy’s health.

The difference between actual output and potential output is known as the output gap, as discussed in a recent Page One Economics article by Scott Wolla. This economic measure is expressed as a percentage of potential output, which is estimated using potential gross domestic product (GDP), where:

“We really needed to help move the needle on educational materials, and so we’re working to provide educators with up-to-date information and quality teaching resources,” says Jane Ihrig, senior advisor and economist in the Program Direction section of Monetary Affairs at the Federal Reserve Board of Governors. Ihrig and Scott Wolla, Fed economic education coordinator, talk with media relations coordinator Shera Dalin about updates educators should make in teaching about new Fed monetary policy tools.

By Paulina Restrepo-Echavarria, Senior Economist; and Praew Grittayaphong, Research Associate

In 2020, governments around the globe started debt-financed spending to battle COVID-19 and to keep economies afloat. Although fiscal responses to this pandemic varied dramatically among countries, together, they added $24 trillion to global debt according to the Institute of International Finance (IIF).

Debt issuance helps cover the gap between how much a government wants to spend and the revenue it expects to receive that year. When issuing new debt, the government may decide to issue it in a local currency or a foreign currency. Foreign currency borrowing can help some countries attract diverse funding sources, mitigate investor fears of local currency fluctuations and reduce financial frictions. For those reasons, many emerging market economies issue a portion of their debt in U.S. dollars.

Chien and Bennett used state and local government expenditures data from the Annual Survey of State and Local Government Finances conducted by the Census Bureau to measure state government expenditures and state legislator data from the National Conference of State Legislatures to measure state political leanings.

The survey’s major government expenditure categories include education services, social services and income maintenance, transportation, public safety, and environment and housing.

To compare spending across states, the authors looked at expenditures as a ratio of state gross domestic product (GDP). Additionally, state political leanings were measured as the average proportion of Democratic state legislators (the state Senate and state lower house combined) minus the corresponding share of Republican state legislators from 2009 to 2018. This creates a measurement of state political leanings ranging from -1 (100% Republican leaning) to 1 (100% Democratic...

The views expressed are those of individual authors and do not necessarily reflect official positions of the Federal Reserve Bank of St. Louis, the Federal Reserve System, or the Board of Governors.

The FRED graph above shows total U.S. patents granted originating from China and Germany from 1992 through 2020, indexed to 100 in 1992.

Germany has long been the most innovative European country in terms of U.S. patents granted, and their total has steadily increased, by 152%, from 1992 to 2020. What’s interesting is how quickly China has closed the gap and even surpassed Germany in patents since joining the WTO on December 11, 2001. As part of their entry to the WTO, China agreed to the basic Trade-Related Aspects of Intellectual Property Rights (TRIPS) provisions protecting intellectual property rights.

In 2001, the U.S. granted 11,894 patents to German inventors, while granting only 266 to Chinese inventors. Over the next 19 years, as of 2020, U.S. patents granted to Germans increased 38% to just over 19,000 and U.S. patents granted to Chinese inventors increased nearly 10,000% to nearly 27,000.

While it’s easier to apply for a patent than to be...

The On the Economy blog will periodically rerun blog posts that were of particular interest. The following post from October looks at the evolving wealth of American retirees.

How has the financial position of U.S. retirees evolved over time?

In a May 2019 analysis, St. Louis Fed Economist and Research Officer YiLi Chien and Research Associate Qiuhan Sun explored that question by comparing the state of current retirees’ household wealth with that of past retirees.

In their Regional Economist article, Better than Ever? The Wealth of Retired Households, the authors examined the balance sheets of households headed by retirees in 2016 with those of households headed by retirees in 2001 and 1989.

They used data available from the Federal Reserve’s Survey of Consumer Finances (SCF).

To gauge how retired households past and present have fared, Chien and Sun looked at the composition of their assets—both financial (e.g., investments) and...

Child poverty is higher in the Eighth Federal Reserve District than in the rest of the country. Recessions, such as the one caused by COVID-19, increase child poverty and income instability. Changes to the federal child tax credit (CTC) may help reduce the share of children living in poverty.

The On the Economy blog will periodically rerun blog posts that were of particular interest. The following post from October looks at the evolving wealth of American retirees.

How has the financial position of U.S. retirees evolved over time?

In a May 2019 analysis, St. Louis Fed Economist and Research Officer YiLi Chien and Research Associate Qiuhan Sun explored that question by comparing the state of current retirees’ household wealth with that of past retirees.

In their Regional Economist article, Better than Ever? The Wealth of Retired Households, the authors examined the balance sheets of households headed by retirees in 2016 with those of households headed by retirees in 2001 and 1989.

They used data available from the Federal Reserve’s Survey of Consumer Finances (SCF).

To gauge how retired households past and present have fared, Chien and Sun looked at the composition of their assets—both financial (e.g., investments) and...

The FRED graph above shows total U.S. patents granted originating from China and Germany from 1992 through 2020, indexed to 100 in 1992.

Germany has long been the most innovative European country in terms of U.S. patents granted, and their total has steadily increased, by 152%, from 1992 to 2020. What’s interesting is how quickly China has closed the gap and even surpassed Germany in patents since joining the WTO on December 11, 2001. As part of their entry to the WTO, China agreed to the basic Trade-Related Aspects of Intellectual Property Rights (TRIPS) provisions protecting intellectual property rights.

In 2001, the U.S. granted 11,894 patents to German inventors, while granting only 266 to Chinese inventors. Over the next 19 years, as of 2020, U.S. patents granted to Germans increased 38% to just over 19,000 and U.S. patents granted to Chinese inventors increased nearly 10,000% to nearly 27,000.

While it’s easier to apply for a patent than to be...