Gathering more and better information on communities that have fallen on economic hard times is crucial to efforts to revive these areas, Federal Reserve Chairman Ben Bernanke said Thursday.
“The development of more and better data on economically distressed communities, together with sophisticated tools for analyzing those data, is essential for continued progress in community economic development,” Bernanke said in prepared remarks delivered via satellite to an economic development summit in Los Angeles.
A copy of his remarks was distributed in Washington.
Bernanke said such information is important for a number of reasons. It can help make companies, entrepreneurs and investors aware of potential development opportunities in such distressed communities. And, the information can help policymakers get a sense of whether their programs to help these areas are effective, he added.
“Good data support community growth and development by helping to identify previously unrecognized market opportunities,” Bernanke said. “Free markets can be a powerful source of economic development, but markets work less effectively when information about potential opportunities is absent or costly for private actors to obtain.”
Over the last 30 years, community development in the United States has evolved from a centralized, federal-government-driven approach to more heavy reliance on the involvement of community-based organizations and agencies for project development and implementation.
In terms of international development, Bernanke noted that “some new thinking ... has rejected the traditional approach to aid, with its emphasis on large-scale projects and top-down planning, in favor of micro-level, bottom-up approaches that use local information and systematic analyses.”
Bernanke, in his speech, did not discuss the future course of interest rates or the state of the U.S. economy.
Bernanke — at his first meeting as Fed chief on March 28 — agreed to boost interest rates to 4.75 percent, the 15th increase since June 2004. Economists predict another rate increase will come at the Fed’s next meeting on May 10 to fend off inflation.