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Dallas Fed examines the Texas and national economies, real estate investment trusts and Texas exports

For immediate release: November 22, 2002

DALLAS—The latest issue of the Federal Reserve Bank of Dallas’ Southwest Economy examines the stalled Texas economy and the future of the national economy.

In "Texas Economy Stalled by Recession," economists Mine Yücel and John Thompson write that though the Texas recession is shallower than previous ones, the state remains in a downturn. They note that overall conditions for industries such as high tech remain bleak and that the transportation and energy sectors are both weak.

The writers conclude that the fate of the Texas economy lies in the national economy.

"If the U.S. economy double-dips, the Texas economy will be stalled in recession for some time," they write. "If the U.S. economy picks up, however, we could see Texas also turning the corner early next year."

Senior economist Jim Dolmas addresses the double-dip recession question in "The National Economy: Heading for a Dip?" Dolmas presents a status report on the health of the apparent recovery and discusses factors influencing the economy’s near-term direction. Additionally, the article looks at the economy’s recent inflation performance and the deflation concerns it has engendered. Evidence of cooling is a cause for concern, Dolmas writes, although the data suggest it is premature to conclude the economy is facing a double-dip recession.

In "Have REITs Helped Tame Texas Real Estate?" Thompson writes that throughout the 1990s, the proportion of Texas real estate owned by real estate investment trusts, or REITs, increased considerably. While the amount of total real estate owned by REITs is still modest, their growing presence may contribute soundness to the overall real estate market. Thompson suggests that REITs enhance market stability by improving efficiency, increasing liquidity and discouraging unjustified lending.

Also in the issue, Dallas Fed Vice President William C. Gruben reveals that Texas exports, which bottomed out last year, have begun to rebound. "Texas Exports Finally Pick Up but Have Far to Go" examines the challenges Texas exports have faced over the past six quarters. Gruben notes that while the turnaround has just begun and the state’s export upturn has varied greatly across geographic markets, performance has been positive for most country groupings â?? with the glaring exception of economically troubled Latin America. Finally, he acknowledges that a full recovery in many of the state’s export sectors will take time.

Find the November/December issue of Southwest Economy online at under the What's New heading.


Media contact:
James Hoard
Phone: (214) 922-5307