Second Quarter, Volume 5, Number 2

Federal Reserve Bank of Atlanta
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Lynne Anservitz
   Editorial Director

Lynn Foley
Kristin Hicks
Nancy Pevey
   Managing Editors

Stephen Kay
   Contributing Editor

William Smith
Jean Tate
   Staff Writers

Elena Casal
Harriette D. Grissom
Nicholas Haltom
   Contributing Writers

Carole Starkey
Peter Hamilton


Bobbie H. McCrackin
   VP and Public Affairs

Thomas J. Cunningham
   VP and Associate
   Director of Research

Pierce Nelson
   AVP and Public
   Information Officer

John C. Robertson
   AVP, Research Department
   Regional Section

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ISSN 0899-6571

Photographs courtesy of Lockheed Martin, U. S. Department of Defense, Northrop Grumman and Elizabeth McQuerry

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      Volume 5, Number 2, Second Quarter 2003

   Risk and Uncertainty

Cover Story vertical line

   Defense Spending Flies
   High in the Southeast

The recent U.S. defense spending bill has been a boon for much of the Southeast. New military contracts will benefit the region?s shipbuilders and aircraft manufacturers but will mostly serve to retain jobs rather than create new ones. Military projects are also rejuvenating technology and construction. But without improvement in the commercial sector, the economic boost from defense spending is unlikely to be sustained.

Regional Focus

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   Glut of Office Space Plagues
   Atlanta As Tenants Disappear

In the 1990s, the Southeast experienced unprecedented commercial real estate growth. Atlanta, in particular, was the paradigm for development and investment. However, the boom ended in 2001, and now Atlanta is awash in vacant office space. When can Atlanta?s commercial real estate market expect to be back on track? Not until at least 2005, according to some analysts.
International Focus vertical line    A Little Credit Goes a Long Way:
   The Global Microfinance Movement
In countries around the world, struggling entrepreneurs are turning for help to a growing industry: microfinance. Microfinance institutions (MFIs), which have their roots in agricultural development, provide small loans and other financial services to households and businesses that otherwise would not have access to them. MFIs have become a profitable, self-sustaining industry that aims to help the poor break the poverty cycle.

   Research Notes & News
      Dollar Index

   The State of the States

   Southeastern Economic Indicators

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