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.

Saving the Environment with Economic Ideas is a set of lessons for high school that provide students with the opportunity to participate in simulations. These simulations demonstrate the potential results of economic-related actions and policies taken and made by the government, businesses, or individuals to conserve and protect many of the natural resources used in the production and consumption of goods and services. Students see in action concepts such as resource allocation, scarcity, value, property rights, negative externalities, and emissions taxes and are encouraged to have lively discussions about what they observe and apply it in various situations. Engaging students in hands-on simulations and application of real environmental concerns helps students learn and analyze how economics plays a significant role in developing ideas and solutions that are put into action to save the environment.

Download the complete curriculum unit or individual...

“[W]hile you see a large increase in foreclosures in the 2008 financial crisis, you don’t see a similar increase in foreclosure during the COVID-19 recession. Actually, the total number of foreclosures declined during the COVID-19 recession,” says Juan Sanchez, a vice president and economist at the Federal Reserve Bank of St. Louis. He talks with Kristie Engemann, economic content coordinator, about trends in credit card debt, mortgage debt and foreclosures during the pandemic and how they compare with those of the financial crisis.

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.

Carl White, Senior Vice President, Supervision

This post is part of a series titled “Supervising Our Nation’s Financial Institutions.”

The Federal Reserve recently unveiled a tool to help small community banks—those with less than $1 billion in assets—comply with a new accounting standard that they are required to implement by 2023. The standard is the current expected credit loss (CECL) methodology for setting banks’ loan loss allowances, and the tool is the Scaled CECL Allowance for Losses Estimator (SCALE).

As we discussed in the previous post, firms everywhere are having serious difficulties filling vacancies. With these worker shortages on everyone’s minds, let’s discuss how the pandemic has shaped the workforce.

The FRED graph above shows the fraction of people who participate in the labor force—that is, who either have a job or are actively looking for one—by age group. In previous recessions, only teenagers had significant declines in participation rates; clearly, most workers who lost their jobs kept looking for another. In 2020, however, participation rates declined across the board, with would-be workers leaving the labor force in the face of widespread shutdowns, health concerns, school closures, and financial support from the government.

That said, different age groups clearly reacted to the recent recession in different ways. Older workers’ participation rates declined through 2021—probably led by a wave of early retirees—but prime-age...

Successful vaccines are bringing the pandemic effectively to an end. And, as economic activity resumes, firms everywhere appear to be having serious difficulties hiring: The news is filled with middling labor market reports, alarming anecdotes, and long restaurant wait times.

The FRED graph above quantifies this shift by depicting, across industries, the number of job openings at the end of each month. It’s very clear that across the board this number has jumped significantly, especially in the past few months.

Such a jump is a very positive development for the U.S. economy. The number of job openings at any given time is affected by both how difficult it is for firms to fill openings and how many openings firms offer in the first place. Insofar as the recent increase is caused by firms expanding, it’s clear that firms are expecting future business growth. Consult the graph to compare the recent jumps to the much lower number of job openings after the...

The FRED graph above shows the quarterly evolution of U.S. net exports of technology, from Q1 1967 to Q1 2021. Net exports of technology are measured as royalties and license fees received minus royalties and license fees paid during this period (as a percentage of GDP).

The U.S. has always been a net exporter of technology and, hence, a net receiver of royalty payments. And net exports as a share of GDP have steadily increased from 0.12% in Q1 1985 to 0.48% in Q3 2011—an increase of 300%! But after 2011, there’s been a slow decline, reaching 0.28% in Q1 2021 (its lowest level since Q1 2002). What’s caused this decline?

The FRED graph below shows, separately, exports of technology in terms of royalties received and imports of technology in terms of royalties paid (again, as a percentage of GDP). While U.S. technology exports have steadily fallen from 0.70% in Q3 2011 to 0.51% in Q1 2021, imports have remained fairly stable. Hence, the decline in net...

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The FRED graph above shows the quarterly evolution of U.S. net exports of technology, from Q1 1967 to Q1 2021. Net exports of technology are measured as royalties and license fees received minus royalties and license fees paid during this period (as a percentage of GDP).

The U.S. has always been a net exporter of technology and, hence, a net receiver of royalty payments. And net exports as a share of GDP have steadily increased from 0.12% in Q1 1985 to 0.48% in Q3 2011—an increase of 300%! But after 2011, there’s been a slow decline, reaching 0.28% in Q1 2021 (its lowest level since Q1 2002). What’s caused this decline?

The FRED graph below shows, separately, exports of technology in terms of royalties received and imports of technology in terms of royalties paid (again, as a percentage of GDP). While U.S. technology exports have steadily fallen from 0.70% in Q3 2011 to 0.51% in Q1 2021, imports have remained fairly stable. Hence, the decline in net...

As a budding economist, Susan Pozo specialized in foreign exchange rates. However, she later turned her eye to worker remittances, the money that immigrants send back to their country of origin.

Remittances, which are part of a country’s balance of payments, weren’t mentioned very much in textbooks at the time. But she recognized the importance of this international financial flow because of her childhood living in Venezuela, where Colombian immigrants would send back money to Colombia.

“It was really through that that I ended up bringing to the table this idea that remittances are a really important economic force that we need to study,” said Pozo, who is director of the Global and International Studies program and professor of economics at Western Michigan University. “So 10 or 15 years into my career, I switched from studying exclusively exchange rates to studying remittances.”

In a Women in Economics Podcast Series episode, Pozo discussed her research...

By Noelle Ullery, Intern

Noelle Ullery is serving her third summer internship at the Federal Reserve Bank of St. Louis. A former member of the St. Louis Fed's student board of directors, she is majoring in economics and English at Xavier University in Cincinnati.

The student board of directors was a valuable opportunity I never expected to have.

This year is the program’s 10th anniversary, with 166 members having served on the board during that time. As a student from Nerinx Hall in Webster Groves, Mo., I participated in the program from 2018 through 2019 and am grateful to have been a part of it. It taught me so much about the Federal Reserve, career readiness and professionalism.

As a budding economist, Susan Pozo specialized in foreign exchange rates. However, she later turned her eye to worker remittances, the money that immigrants send back to their country of origin.

Remittances, which are part of a country’s balance of payments, weren’t mentioned very much in textbooks at the time. But she recognized the importance of this international financial flow because of her childhood living in Venezuela, where Colombian immigrants would send back money to Colombia.

“It was really through that that I ended up bringing to the table this idea that remittances are a really important economic force that we need to study,” said Pozo, who is director of the Global and International Studies program and professor of economics at Western Michigan University. “So 10 or 15 years into my career, I switched from studying exclusively exchange rates to studying remittances.”

In a Women in Economics Podcast Series episode, Pozo discussed her research...

The March 2020 CARES Act was a large fiscal package intended to provide financial relief to U.S. households during the COVID-19 pandemic. Importantly, this law has permitted qualifying households with federally backed mortgages to request mortgage forbearance, which reduces or pauses monthly mortgage payments.1 

This essay documents the impact of the CARES Act forbearance measures and investigates whether this relief assisted the recovery from the COVID-19 recession.2 We show that, unlike in past recessions, aggregate mortgage delinquency rates on credit reports did not rise during the 2020 recession. However, once forbearance is taken into account, actual delinquency rates are 2.6 times greater. We also find that the extent of forbearance is positively related to the economic recovery across U.S. states, even when controlling for other factors.

Forbearance programs do not forgive loans: Households still owe missed payments. Rather, these programs allow...

By Ana Maria Santacreu, Senior Economist; and Jesse LaBelle, Research Associate

The protection and enforcement of intellectual property rights (IPR) have become an important component of current trade policy. For instance, the U.S.-China trade war that began in 2018 was influenced by American accusations of misappropriation of technology by China. And negotiations of the U.S.-Mexico-Canada Agreement, which replaced NAFTA in 2020, introduced a high-standard intellectual property (IP) chapter requiring strong and effective protection and enforcement of IPR.

The emphasis on IPR related to trade is not a new phenomenon. Indeed, the scope of regional trade agreements (RTAs) has changed over the recent decades. Prior to the formation of the World Trade Organization (WTO) in 1995, RTAs were mostly concerned with removing trade barriers between the countries signing the agreement. However, the Uruguay round introduced Trade-Related Aspects of Intellectual Property...

"Is real output greater or less than potential? And is real output growing more or less rapidly than potential? The answer to these questions are central to policy decisions." 

—Richard G. Anderson, Economist1

Gross domestic product (GDP) is the total market value, expressed in dollars, of all final goods and services produced in an economy in a given year. GDP indicates the size of the economy by measuring the economy's output. It is also one of the key measures economists use to assess the health of the economy. For GDP to measure the "real" increase or decrease in output over time, however, the effect of price changes needs to be removed from the data. Real GDP does that: It controls for (takes out) inflation and more accurately reflects actual economic growth. But knowing the size of the economy, or its growth rate, only tells part of the story. For a more complete assessment of the economy's health, it is helpful to compare how much the economy...