Contents

William Poole, The Monetary Policy Model

Stuart G. Hoffman, Reflections of a Professional Life-Long Fed Watcher

Thomas F. Siems and Adam S. Ratner, Strengthening Globalization’s Invisible Hand: What Matters Most?

Jacob De Rooy, Pricing of Mutual Fund Services in Retirement Plans: Evidence from Open-End Equity Funds

Edward P. Lazear, Productivity and Wages

Lloyd B. Thomas and Danhua Wu, Expected Future Budget Deficits and the U.S. Yield Curve

Dave Andrea, Original Equipment Suppliers Association

Robert P. Parker, Energy Information Administration Provides Extensive Data on Petroleum Supply and Demand Conditions

Book Reviews

Strengthening Globalization’s Invisible Hand: What Matters Most?

Developed Financial Markets, Human Capital, Access To Technology, And Strong Legal Systems Are Essential For Healthy Economic Growth

By Thomas F. Siems and Adam S. Ratner

Thomas F. Siems is senior economist and policy advisor in the Research Department at the Federal Reserve Bank of Dallas and also teaches in the School of Engineering at Southern Methodist University. He earned a B.S.E. from The University of Michigan, and M.S. and Ph.D. degrees from Southern Methodist University. Thomas has published more than 50 articles in various academic journals, books and Federal Reserve publications and is NABE’s only two-time winner of the Edmund A. Mennis Contributed Paper Award. He has also published four children’s books and plans to release another, The Dangerous Pet, very soon.

Adam S. Ratner is a Business Enterprise Consultant with West Monroe Partners in Chicago, Illinois. He earned his B.A. in Economics from DePauw University. Prior to West Monroe Partners, Adam gained valuable experience with the Federal Reserve Bank of Dallas where he studied international trade patterns and published his first article on outsourcing. He recently traveled to both India and China to gain greater insight into their respective financial markets.

In this paper, we investigate what matters most to sustaining strong economic growth in today’s more globalized, knowledge economy. An examination of 2005- 2006 statistical and survey data across 52 countries reveals that economic growth is driven mainly by developed and trustworthy financial markets, a well-educated and skilled workforce, and access to information and communications technologies. Moreover, we find that creditworthy financial markets are strengthened by free and open economies based on the rule of law and legal protections. Our findings support the notion that innovative ideas and entrepreneurship are at the heart of economic growth. However, these ideas need support from institutional policies and practices that create and sustain growth by providing needed protections and a market in which to finance them.

This paper won the 2006 Edmund A. Mennis Contributed Paper Award, presented at NABE’s 48th Annual Meeting, September 11, 2006.

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