Economic Review
Second Quarter 2002 

How High Tech is the Tenth District?
By Chad Wilkerson 

Newspapers in the Tenth Federal Reserve District generally keep a close eye on where their cities rank in national studies of high-tech activity. Readers have good reason to be interested in how “high tech” their communities are, despite the recent downturn in the sector. High-tech workers are among the best paid of all workers and, if these recent studies are correct, an area’s failure to embrace the “New Economy” could result in a lower standard of living and fewer opportunities for residents down the road. But studies of high-tech cities, which are usually produced by think tanks, trade groups, or business magazines, have varying results and usually focus only on major metropolitan areas. As a result, it is often difficult for policymakers, businesses, and residents in the Tenth District to understand where they really stand in the “New Economy” and how they got there.

Wilkerson shows that much of the Tenth District is quite high tech, once the geographic distribution of the region’s population is taken into account. Across the country, the overarching determinant for the amount of local high-tech activity appears to be a metro’s size. Because the Tenth District has relatively few large cities, the level of high-tech activity in most district states falls short of the national average. But analysis of high-tech activity in metro areas shows that nearly all of the district’s larger metros exceed national averages for cities their size. In fact, several of the region’s larger cities rank among the most high-tech places in the nation.

Back to top          Economic Review home 

Consumer Confidence After September 11
By C. Alan Garner 

The terrorist attacks on September 11 dealt a serious blow to the U.S. economy. The damage included the tragic loss of human life, massive property destruction, and disruptions to the travel and shipping industries. But immediately after the attacks, many observers also worried about the possible harm to business and consumer confidence. Although the effects on business confidence are hard to measure, regular surveys of households make it easier to assess the effects on consumer confidence. These surveys show that consumer confidence was surprisingly resilient.

Faced with this resilience, forecasters and policymakers struggled to interpret the movements in consumer confidence. Did consumers quickly return to more normal economic behavior even though they were shocked by the terrorist attacks? Or was the resilience somehow illusory? Were measures of consumer confidence actually lower than would be expected based on prevailing economic conditions? The answers to these questions might have implications about the economic outlook or the proper settings for monetary and fiscal policy.

Garner examines the impact of the terrorist attacks on consumer confidence at the end of 2001. He finds that the terrorist attacks did not cause a clear weakening of consumer confidence after September 11. As a result, the consumer confidence indexes maintained a fairly normal relationship to other economic indicators and did not contain much new information for forecasters and policymakers. The resilience of consumer confidence may have offered some assurance, however, that the worst fears about the economic outlook would not be realized.

Back to top          Economic Review home 

The New Power of Regions: A Policy Focus for Rural America—A Conference Summary
By Mark Drabenstott and Katharine H. Sheaff 

Rural policy should encourage more regional partnering among rural firms, communities, and governments. That was the conclusion reached by a dozen policy experts and 200 rural leaders from throughout the nation who gathered at the Center’s third annual rural policy conference, The New Power of Regions: A Policy Focus for Rural America. The conference was also sponsored by the bank’s Community Affairs Department.

Drabenstott and Sheaff summarize the conference, which began by exploring why regional synergies are important in seizing a new frontier of rural opportunities. Participants were quite upbeat about that frontier, with considerable discussion of pharmaceuticals grown in fields, advanced manufacturing, and e-commerce.

But participants were even more convinced that such opportunities will develop only with new models of partnering—across firms and across governments. Case studies of pharmaceutical farming in Iowa and new business initiatives in the Four Corners region underscored the point. In the final session, policy experts and conference participants agreed that building new regional partnerships needs new policy directions. This will require new efforts by leading federal agencies like the U.S. Department of Agriculture, by state and local governments, and by public institutions, such as land grant universities and community colleges.

Back to top          Economic Review home