Third Quarter, Volume 5, Number 3

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ISSN 0899-6571

Photographs on pages 15, 17 and 18 courtesy of Jennifer Weissman; page 19 courtesy of Agência Brasil

   A “Job Loss” Recovery

   State of Decline:
   State Budgets Feel the Pinch

State governments, faced with record-breaking revenue declines, have raised taxes, curtailed spending and dipped into reserve funds to balance their budgets. These fiscal problems pose a continuing challenge and have important implications for regional and national economic performance. While the accelerating economic recovery should lead to an increase in revenues, it will be some time before states’ financial health improves.

   Taking Off: Discount
   Airlines Transform Flying

Discount airlines in the United States appear to be thriving at a time when some major carriers have been pushed into bankruptcy. Some analysts attribute discount airlines’ success to their use of the point-to-point system of organizing air travel. Will the big carriers change their hub-and-spoke systems to try to recapture some of the market that fuels discount air travel?

Latin American policymakers recognize that “second-generation” reforms — including tax reforms, flexible labor markets, central bank independence, social safety nets, anticorruption measures, improved corporate governance and targeted poverty reduction — are needed to build an economy that will grow and prosper. Achieving these second-generation reforms will be no easy task.

   Research Notes & News
     Dollar Index

   The State of the States

   Southeastern Economic Indicators