Chicago Fed Letter
A New Era of Community Banking
Michael Austin, Marshall Eckblad, Courtney Markovich, Jacqunette Murray, Wade Perry, Nick Strok, and Terri Woodford
The 11th annual Community Bankers Symposium, cosponsored by the Federal Reserve Bank of Chicago, the Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency (OCC), was held at the Chicago Fed on November 18, 2016. This article summarizes key presentations and discussions at the event.
The Burden of Taxation in the United States and Germany
Lorenz J. Jarass, Anthony E. Tokman and Mark L. J. Wright
After 35 years without significant changes to the federal tax code in the United States, tax reform is back on the legislative agenda. Both the congressional Republican delegation (the House GOP) and the Trump administration (the administration) have released draft proposals for tax reform. And both focus heavily on reform of corporate income taxation. The reason for this is quite simple: Increased globalization has made it easier for multinational enterprises to shift their reported profits around the world in order to pay less in taxes. This has led to concerns about the erosion of the U.S. corporate tax base, with reductions in corporate tax rates (as well as a move from a residential to a destination-based tax system) seen as one way of encouraging corporations to pay taxes here.
Economy to Cruise Near Speed Limit in 2017 and 2018 Even as Auto Sales Downshift
William A. Strauss and Thomas Haasl
According to participants in the Chicago Fed’s annual Automotive Outlook Symposium, the nation’s economic growth is forecasted to be near its long-term average this year and to strengthen somewhat in 2018. Inflation is expected to increase in 2017 and to hold steady in 2018. The unemployment rate is anticipated to edge lower to 4.4% by the end of 2017 and to remain at that rate through 2018. Light vehicle sales are predicted to decrease from 17.5 million units in 2016 to 17.1 million units in 2017 and then to 16.9 million units in 2018.
Female Labor Supply and Why Women Need to Be Included in Economic Models
Mariacristina De Nardi and Sharada Dharmasankar
Women contribute a large fraction of aggregate labor hours, earnings, and labor force participation. Yet, many models used to study the effects of government policy ignore gender differences and use data on men only. These models are used extensively for examining the effects of government policies and programs—including Social Security, taxation, and welfare programs. Before evaluating how people respond to such policies, it is important to construct a reliable model of how people behave and why.
