Economic Policy

Exploration of the intersection of policy and economic trends, public finance, and economic development

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Flash Index: February 2016

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Illinois’ economy continues to grow at a modest rate despite a slight uptick in the unemployment rate, according to the University of Illinois Flash Index.

The Index rose to 105.6 in February, up three-tenths of a point from the previous month, and well above the 100 level that marks the division between growth and decline. The slight rise reverses a two-month trend of lower readings since the index reached 106.1 in November 2015.


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Flash Index: March 2016

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The U. of I. Flash Index declined in March to 105.1 from its 105.6 level in February. The current reading is the lowest in three years (March 2013, 104.7). While the Illinois economy is still growing, as 100 is the dividing line between growth and decline, the state still lags behind the rest of the nation.

“A disturbing trend is emerging with Illinois falling further behind the national economy,” said J. Fred Giertz, who compiles the Flash Index for the University of Illinois Institute of Government and Public Affairs.


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Flash Index: April 2016

Authors

The University of Illinois Flash Index, which tracks economic activity in the state, fell for the second consecutive month in April, dropping to its lowest level since December 2012.

The April index of 104.7 is a decline of four-tenths of a point from March, and represents a fall of nearly one full point since February. While remaining above the 100 mark which divides economic growth and contraction, the decline indicates growth is slowing significantly.


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Flash Index: May 2016

Authors

After two months of decline, the University of Illinois Flash Index climbed in May to 105.3, its highest reading since February. The index, which is a measure of economic activity in Illinois, was at 104.7 in April and 105.1 in March. 

“This reflects a somewhat stronger Illinois economy consistent with the reported uptick in the national economy the second quarter of this year,” said University of Illinois Professor Emeritus J. Fred Giertz. “The index is still in the 105 to 106 range it has occupied this year, down slightly from 2015.”


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Flash Index: June 2016

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The University of Illinois Flash Index fell slightly in June to 105.0 from its 105.3 level in May. The index has settled in the 105 range for the past six months after a two-year period in the 106 to 107 range. Any reading above 100 indicates economic growth.

The consistency in readings in the first half of 2016 suggests that the Illinois economy is growing, although somewhat more slowly now than in 2014 and 2015. There is good news, however, about unemployment.


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The Illinois ‘Financial Condition Penalty’ Continues to Grow

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Analysis by the Fiscal Futures Project demonstrates the consequences of the state's poor credit rating. 

On June 16 the state of Illinois sold $550 million in General Obligation Bonds. This was the first bond issue since the state’s recent credit rating downgrades by Moody’s and Standard and Poor’s. The sale also occurred as Illinois ends FY16 without a budget, and failed to pass a budget for FY17.


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Illinois Still in the "Financial Condition Penalty" Box

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Illinois’ Jan. 14 sale of $480 million in general obligation bonds brought the state nearly $53 million less than it could have received had it been in better fiscal shape.

The analysis also indicates that this “financial condition penalty” could more than double in future years if the crisis continues. And when future capital needs are included, the estimated penalty could grow to more than $400 million per year, according to the study.


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Rachel Weber is a professor in the Urban Planning and Policy Department at the University of Illinois at Chicago where she conducts research in economic development, real estate, and public finance. She has expertise in the areas of urban and regional economic development, public finance, municipal government law, planning theory, andreal estate. She has conducted extensive research on the impact of changes in capital markets on urban economies and the built environment. She has also written on school and infrastructure finance, the effect of e-commerce on bricks-and-mortar retailers, the design of incentive contracts, and participatory budgeting. She is the co-editor of the Oxford Handbook of Urban Planning and author of From Boom to Bubble: How Finance Built the New Chicago (University of Chicago Press, 2015). Weber was appointed by Chicago Mayor Rahm Emanuel to the Tax Increment Financing Reform Task Force and was a member of the Urban Policy Advisory Committee for then-presidential candidate Barack Obama.

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Megan Konar conducts policy-relevant research that focuses on the intersection of water, food, and trade. Her research is inherently interdisciplinary, drawing from hydrology, environmental science, and economics. To conduct this research, Konar applies a range of quantitative tools, such as modeling, network analysis, and econometrics. Konar's research is motivated by questions such as: How does trade link water and food systems across scales? How will climate and socio-economic shocks impact global food trade and its associated embodied water resources? What policy options will best improve water and food security?


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Richard Funderburg is an Assistant Professor of Public Administration at the University of Illinois Springfield. Funderburg’s research centers on the ability and limitations of state and local economic development policy to entice private businesses to locate, start up, or expand within the region and the fiscal and budget consequences of public efforts. Funderburg’s research appears in several regional science and planning journals including the Journal of Regional Science, Environment and Planning A, Urban Studies, Transportation Research A, Journal of Environmental Planning and Management, Growth and Change, and Land Use Policy. Prior to his doctoral studies, Rick worked 10 years for the California Employment Development Department where he developed state plans, forecasts, budgets, legislation, and regulations pursuant to workforce investment, vocational education, and welfare-to-work programs.

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