As much of the Midwest economy struggles to boost its economic performance and as Midwest governments try to maintain funding for public services, the subject of state and local business taxes arises. This summer, the state of Michigan replaced its innovative but contentious “single business tax” with two lesser taxes, one on business income and the other on business gross receipts. Meanw... Read More

As the “Detroit 3” automotive companies have experienced shrinking profits and market share, many midwestern communities have experienced falling jobs, income, tax revenues and public services—to say nothing of the households and families working in the industry. This summer, automotive workers and communities are watching closely as the terms of automotive employment—especially wages—are... Read More

To most people, the subject of tax structure is a sleepy one. An important exception is when looming changes to the tax structure raise the prospects for who will pay for public services (and how much they will pay). In characterizing this debate, Senator Russell B. Long of Louisiana once said, “Don't tax me, don't tax thee, tax that fellow behind the tree!” Public discussion also... Read More

In recent years, Fed Chairman Bernanke and other economists have been analyzing the causes of the increased stability in the U.S. economy, a phenomenon known as “The Great Moderation.” Most of their analyses have focused on the national economy, noting that the fluctuations, or volatility, in GDP growth, employment growth and inflation have declined noticeably over the past 25 years or so... Read More

On Monday, May 14, 2007, DaimlerChrysler Corporation announced it would spin off its Chrysler division by selling it to Cerberus LLC, a private equity company. The news ended speculation regarding a possible sale of Chrysler as well as the identity of its ultimate acquirer. The pending sale of Chrysler has since been widely covered in the media. Some have referred to the sale as a watersh... Read More

For several years running, the national pace of investment in housing greatly exceeded historic norms. Accordingly, housing market observers speculated that strong rates of home building and price appreciation would falloff markedly at some point in the near future. Nationally, real residential investment growth averaged 9 percent from 2003-2005; average home prices rose by 6.8 percent in... Read More

As our roads become increasingly congested, tolling and privatization of highways will be increasingly important lifelines, especially for large urban economies. The idea that motorists should pay tolls when driving on congested highways has long been advocated by economists. Conceptually, the “public” part of highway transportation is limited to the necessary intervention by public autho... Read More

Financial and insurance activities have historically concentrated in cities. In large part, this location tendency follows from the deep and broad information that is needed in allocating capital to those endeavors of highest return. Owing to their intense human interaction, large cities are advantaged in gathering and processing information about potential investments, and in matching sp... Read More

As I described in my August 2006 entry, government statistics tend to significantly undercount manufacturing activity. The undercounting occurs because manufacturing companies increasingly outsource service activities that they formerly performed “inhouse,” such as accounting, payroll, design, R&D, and others. These activities are increasingly attributed to service industry sectors in... Read More

With economic growth lagging in many Midwest communities, institutions of higher education are being asked to play a bigger role in their surrounding regional economies. This past fall, the Chicago Fed held a conference addressing the role of higher education in promoting regional growth and development. In what ways does higher education fit into the regional development picture... Read More