UEP Colloquium: Tales from the Boston Fed

Research and Policy Engagement in New England

At this week’s UEP Colloquium we welcomed Darcy Saas, Deputy Director of the New England Public Policy Center. The NEPPC was established in 2005 by the Federal Reserve Bank of Boston with the mission of promoting “better public policy in New England by conducting and disseminating objective, high-quality research and analysis of strategically identified regional economic and policy issues. When appropriate, work with regional and Bank partners to advance identified policy options.” The Boston Fed serves all of New England, and the NEPPC works with an advisory board from around the region to identify economic and policy issues and disseminate research findings. The advisory board consists of universities, private research and consulting firms, government offices, and the Pew Charitable Trust. The NEPPC and the Boston Fed work toward two goals: maximum sustainable output and employment, and stable prices with low rates of inflation.

Saas spoke about the research process before delving into some of the details of their research. Because the NEPPC is funded through the Federal Reserve budget, and not through particular stakeholders, they are able to provide relatively objective research on economic policy. Because they have no funding-related external deadlines, they are free to complete detailed and exhaustive studies of complex issues. Saas did admit that this framework makes it difficult to work within short-term policy cycles. Many of NEPPC’s research projects have taken years to achieve their intended impacts.

Municipal Aid Reform: This study, conducted by the NEPPC, looked at the process by which cities and towns receive state and federal aid. The proposed new process would compare resources to expenditures, and analysis the municipal gap between them. A 2013 proposal by Governor Deval Patrick used a similar formula to that proposed by the Center.

Retaining Recent College Graduates: What factors effect whether or not college students remain in town after graduating? Boston brings in many student, but has a lower retention rate than many other cities. The NEPPC has looked at housing prices as one possible factor, but found that employer workshops and internships have a greater effect.

Labor Market Trends in Massachusetts: Is there a mismatch between employee skills and employer needs in the Massachusetts labor market? The Center’s study found that the supply of skilled workers is not likely to keep pace with demand in coming decades.

The NEPPC has researched, and continues to research many other topics affecting New England. A complete listing of their research can be found on their website: http://bostonfed.org/economic/neppc/

Audience members questioned the true objectivity of the Center, which is likely to carry some neoliberal agenda. Saas addressed this by saying that, since former fed chairman Alan Greenspan’s departure, the expressed neoliberal agenda has not been as powerful a force in the Boston Fed.

Another source of bias in the Center’s approach could be in their method for choosing research questions. According to Saas, the NEPPC conducts surveys among key stakeholders. Research proposals are vetted by senior management in the Fed.

We also heard about the Working Cities project, which provides grants to cities that emphasize collaborative leadership. The grants have benefited 20 Massachusetts cities with lower income levels and higher poverty rates. It is hoped that projects pioneered through these grants can be applied to other cities, and scaled up to the state level.

map of massachusetts working cities

Be sure to attend next week’s colloquium on Wednesday, November 12, featuring Yuting Liu. Liu will be discussing affordable housing settlements and living environments in Chinese large cities. See you there!