A FIRE Economy is any economy based primarily on the paper intensive sectors of Finance, Insurance, and Real Estate (FIRE). It's New York City's largest industry and a prominent part of the service industry in the US overall economy and other western, developed countries. FIRE activities are unique in that they generate relatively large profit margins with little productive resources or capital employed other than people and paper.

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  • A FIRE Economy is any economy based primarily on the paper intensive sectors of Finance, Insurance, and Real Estate (FIRE). It's New York City's largest industry and a prominent part of the service industry in the US overall economy and other western, developed countries. FIRE activities are unique in that they generate relatively large profit margins with little productive resources or capital employed other than people and paper. In recent years, FIRE has created a positive feedback loop for rapid suburban development in the US as new real estate developments generate finance (mortgage) activities and associated insurance activity. This activity in turn creates demand for yet further real estate development and the cycle feeds upon itself. This term is used in the financial press and blogs; its origin is in the realm of North American industrial classification. "Finance, Insurance, and Real Estate" is the title of 1992 U.S. Census Bureau Standard Industrial Classification (SIC) Division H. Its coverage was "All domestic establishments that provide financial, insurance, or real estate services. " Its coverage was elaborated in 2-digit SIC codes 60 through 67. The SIC was replaced by the North American (Canada, USA, Mexico) Industry Classification System (NAICS) starting in 1997. The SIC had 10 top-level divisions, NAICS has 20. The new NAICS essentially split the old Division H into code 52 Finance and Insurance and code 53 Real Estate and Rental and Leasing . The newer NAIC 2-digit codes, 52 and 53, are extensively elaborated -- down to the 5-digit level. They remain largely unchanged in the 2007 NAICS drill down chart whose details are this for code 52 and this for code 53 . The entire mapping from SIC to NAICS is shown in this table or this one . The second use of the term derives from the study of financial capital and income -- as opposed to industrial capital and income. To characterize the so-called financial services industries, economists carved out part of the SIC/NAIS breakdown of types of industry: FINANCE, INSURANCE, AND REAL ESTATE. They contracted this to FIRE, deliberately invoking the negative connotations which were, at least then, contrary to conventional wisdom. The following table elaborates on this dichotomy in the header row and gives examples in ensuing rows. The term may be subtly pejorative as the major output of a FIRE economy is paper; there is thus a corresponding implication of paper burning, or of paper fueling a fire -- indicating perhaps a false sense of economic well being upon which these economies are based.
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  • A FIRE Economy is any economy based primarily on the paper intensive sectors of Finance, Insurance, and Real Estate (FIRE). It's New York City's largest industry and a prominent part of the service industry in the US overall economy and other western, developed countries. FIRE activities are unique in that they generate relatively large profit margins with little productive resources or capital employed other than people and paper.
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  • FIRE economy
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