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Dallas Fed examines border growth, new education initiatives and China's growing economic influence in East Asia

For immediate release: May 24, 2002

DALLAS—The latest issue of the Federal Reserve Bank of Dallas Southwest Economy examines growth on the Texas Mexico border and discusses new federal education initiatives. It also addresses Chinarole in recent changes to East Asiaeconomic landscape.

In "Growth on the Border or Bordering on Growth?" senior economist Pia Orrenius and economic analyst Anna Berman look at the border economy from 1990 to today. They argue that the late 1990s border boom was unprecedented, and because it was based on good fundamentals of free trade and a stable Mexican economy, border growth is likely to continue albeit at a slower pace.

Dallas Fed senior economist and policy advisor Lori Taylor examines new federal education initiatives in "A Dose of Market Discipline: The New Education Initiatives." Taylor says the No Child Left Behind Act of 2001, coupled with the expansion of education IRAs as part of last yeartax cut, provides consumers with substantially more information about public schools and should give a small boost to competition among schools. By relying on market forces, the federal government should be able to leverage its relatively small role in elementary and secondary education into a more powerful force for change. In addition, provisions offering flexibility in exchange for accountability represent a subtle but important shift from a system that tries to manage the educational process to one that emphasizes results. Taylor concludes that the new education initiatives will provide a dose of market discipline that should improve Americaschools.

Finally, in "ChinaGrowing Economic Influence in East Asia after WTO," economists Jahyeong Koo and Dong Fu note that China's trade and investment ties with its East Asian neighbors are strengthening. "China expects its economy to grow at an annual rate of 6 to 7 percent over the next 10 years. This projected growth will require further openness of trade and investment as well as continuing economic reforms," Koo and Fu write. The writers conclude that although the path of change is uncertain, China is likely to have increasing economic influence in the region as a result of its WTO accession.


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James Hoard
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