International Business Council hosts “Dialogue with the Fed”

Sarah-Grace Battles

A recent International Business Council event discussing the current state of the economy featured the Director of Regional Economic Information Network (REIN) of the Atlanta Federal Reserve Bank, Galina Alexeenko.

She began as an International Analyst and then moved to her current role. The REIN program is an outreach program they connect people in the research department in the Atlanta Federal Reserve and in the reserve branches.

There five branches include: Nashville, New Orleans, Birmingham, Miami and Jacksonville.

The program focuses on business and community leaders, and others who make decisions in the economy in order to get forward looking information and fill in some gaps in the data.

Q: How does the Southeast’s economy serve as an example or model as how to come back from the recession? There’s diversity and balance in the economy here in Chattanooga. What are your thoughts?

A: There’s been a lot of foreign investment in commercial real estate in particular. Chinese investors, European investors and includes both push and pull factors. The country looks attractive for investors. Our economy is the best looking for future growth and it looks much better than aging Europe and Japan. It’s a very dynamic economy and if you an investor and see the dollar rising and expect it to continue rising then you want to invest here.

Q: How is the workforce not being as productive? The growth is less than 1 percent over the last five years. How are we in trouble?

A: This is something in the election year you wish candidates would be bringing up. Productivity is the main determinant of the standard of living. Over the past 5 years, productivity growth has been about .5%. With the productivity growth we have now, it will take 140 years to double our standard of living. This is something that hasn’t been talked about as much in popular discourse. The truth is there are many theories and each one has may be right. If you look at at labor productivity, what makes people productive? It’s their education, what they have to work with. For example, in the 50s and 60s a lot of productivity growth because there were a lot of changes in organizational practices especially in manufacturing. Some of the theories that explain this are: older workers who are more experienced are retiring and those entering the work force are lower waged and lower skilled. Another theory states that older people may be less productive and there are more of them in the workforce. The Atlanta Fed’s stance is that most likely the declining productivity growth has been a result of the capital deepening especially during the financial crisis because of lower investment. I talk to business leaders and if I ask about their companies, they are saying they are doing much more with less and their output of sales has grown while the labor force has stayed the same. That tells you the productivity is growing but the numbers don’t support that.

Q: What’s the gazelle project that the Federal Reserve conducted?

A: Within the past 2 or 3 years, the issue of new business formation has come up. Small businesses aren’t getting credit. What we looked at with the Fed were not just small businesses, but small fast growing businesses, so called gazelles. because they create the most jobs. We basically went and interviewed founders of these companies, We asked them about where they got their money when their started and other standard questions to find out what is it that they have or needed to hit the ground running and make investing right now. Some of the companies I talked to were founded with their own savings. That project didn’t find something super groundbreaking and it supported the data.



For more information about the IBC, visit

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