Dallas Fed Economist Says Texas Has Fared Well in Cooling Economy

Apr 03, 2001, 01:00 ET from Federal Reserve Bank of Dallas

    DALLAS, April 3 /PRNewswire/ -- Despite a second-half weakening, the Texas
 economy fared well overall in 2000, says Dallas Fed assistant economist John
 Thompson in the latest issue of the Federal Reserve Bank of Dallas publication
 Southwest Economy.
     Thompson writes that Texas' annual employment growth registered a lofty
 3.7 percent gain in 2000, easily surpassing the national figure of
 1.6 percent.  High energy prices were a positive force for the Texas economy.
 Texas trade conditions also continued strong in 2000.  Total exports during
 the first three quarters exceeded $78 billion, a 24.7 percent increase over
 the same period in 1999 and the largest percentage gain since 1987.  However,
 Texas did not remain untouched by the cooling U.S. economy.  Thompson says
 that weakened economic growth negatively affected almost every sector,
 especially high tech, but concludes that high energy prices and rising export
 trade with Asia should continue to buffer the state against unfavorable
 economic winds.
     In another article, Dallas Fed economist Mark Guzman reports that an
 important source of the recent U.S. economic prosperity has been its healthy
 and stable banking sector.  Although devoid of major problems, the banking
 system has undergone changes, especially related to its market structure.
 Two primary factors affecting banking market structure have been financial
 deregulation and technological innovation.
     Financial deregulation has led to greater concentration within the
 industry but has had little impact on the competitive nature of banking.  The
 same holds for the broader financial services industry.  The impact of
 technology is less clear.  Technological innovations often lower costs, which
 spurs competition by allowing easier entry into markets.  However, it is
 unknown, long term, whether increased competition in the banking sector will
 follow, as greater access to a market does not guarantee new entrants success.
     In anticipation of the third summit of the ongoing Free Trade Area of the
 Americas hosted by Quebec City this month, vice president and director of the
 Dallas Fed's Center for Latin American Economics Bill Gruben reviews the
 benefits of free trade in the Americas for the final article of this issue.
     Find the March/April issue of Southwest Economy online at
 www.dallasfed.org under the What's New heading.
 
 

SOURCE Federal Reserve Bank of Dallas
    DALLAS, April 3 /PRNewswire/ -- Despite a second-half weakening, the Texas
 economy fared well overall in 2000, says Dallas Fed assistant economist John
 Thompson in the latest issue of the Federal Reserve Bank of Dallas publication
 Southwest Economy.
     Thompson writes that Texas' annual employment growth registered a lofty
 3.7 percent gain in 2000, easily surpassing the national figure of
 1.6 percent.  High energy prices were a positive force for the Texas economy.
 Texas trade conditions also continued strong in 2000.  Total exports during
 the first three quarters exceeded $78 billion, a 24.7 percent increase over
 the same period in 1999 and the largest percentage gain since 1987.  However,
 Texas did not remain untouched by the cooling U.S. economy.  Thompson says
 that weakened economic growth negatively affected almost every sector,
 especially high tech, but concludes that high energy prices and rising export
 trade with Asia should continue to buffer the state against unfavorable
 economic winds.
     In another article, Dallas Fed economist Mark Guzman reports that an
 important source of the recent U.S. economic prosperity has been its healthy
 and stable banking sector.  Although devoid of major problems, the banking
 system has undergone changes, especially related to its market structure.
 Two primary factors affecting banking market structure have been financial
 deregulation and technological innovation.
     Financial deregulation has led to greater concentration within the
 industry but has had little impact on the competitive nature of banking.  The
 same holds for the broader financial services industry.  The impact of
 technology is less clear.  Technological innovations often lower costs, which
 spurs competition by allowing easier entry into markets.  However, it is
 unknown, long term, whether increased competition in the banking sector will
 follow, as greater access to a market does not guarantee new entrants success.
     In anticipation of the third summit of the ongoing Free Trade Area of the
 Americas hosted by Quebec City this month, vice president and director of the
 Dallas Fed's Center for Latin American Economics Bill Gruben reviews the
 benefits of free trade in the Americas for the final article of this issue.
     Find the March/April issue of Southwest Economy online at
 www.dallasfed.org under the What's New heading.
 
 SOURCE  Federal Reserve Bank of Dallas