scholarly journals Real Wages, Aggregate Demand, and the Macroeconomic Travails of the US Economy: Diagnosis and Prognosis

2010 ◽  
Author(s):  
Mark Setterfield
Keyword(s):  
Aggregate Demand ◽  
Real Wages ◽  
Diagnosis And Prognosis ◽  
Us Economy ◽  
The Us

scholarly journals Demand and Defective Growth Patterns: The Role of The Tradable and Non-Tradable Sectors in an Open Economy

2014 ◽  
Vol 104 (5) ◽  
pp. 272-277 ◽  
Author(s):  
Sandile Hlatshwayo ◽  
Michael Spence
Keyword(s):  
Open Economy ◽  
Aggregate Demand ◽  
Value Added ◽  
Growth Patterns ◽  
Structural Elements ◽  
Total Income ◽  
Us Economy ◽  
The Us ◽  
Tradable Sector

This paper examines the underlying structural elements of US growth patterns, pre- and post-crisis. Prior to the recession, the US economy exhibited a defective growth pattern driven by outsized domestic demand. As domestic aggregate demand retreats to more sustainable levels relative to total income, the tradable side of the economy is a catalyst for restoring strong growth. A structural rebalancing is already underway; although it is only a third of the economy, the tradable sector generated more than half of gross gains in value-added since the start of the recovery. However, distributional issues loom on the horizon.

The Effect of New Deal Policies Revisited

2020 ◽  
Author(s):  
Yangyang Ji
Keyword(s):  
New Deal ◽  
Aggregate Demand ◽  
American Economic Review ◽  
Supply Side ◽  
Natural Rate ◽  
Jel Codes ◽  
The Great Depression ◽  
Us Economy ◽  
The Us ◽  
The New Deal

Abstract Eggertsson (2012, American Economic Review, 102, 524–55) finds that when the nominal interest rate hits the zero lower bound, the aggregate demand (AD) curve becomes upward-sloping and supply-side policies that reduce the natural rate of output, such as the New Deal implemented in the 1930s, are expansionary. His analysis is restricted to a conventional equilibrium where the AD curve is steeper than the aggregate supply (AS) curve. Recent research, however, demonstrates that an alternative equilibrium arises if the AD curve is flatter than the AS curve. In that case, the same policies become contractionary. In this article, I allow for both possibilities, and let data decide which equilibrium the US economy actually resided in during the Great Depression. Following the work of Blanchard and Quah (1989, American Economic Review, 79, 655–73), I find that there is a high probability that New Deal policies were contractionary. (JEL codes: E32, E52, E62, N12).

The rate of profit and economic stagnation in the United States economy

1997 ◽  
Vol 1 (1) ◽  
pp. 161-174
Author(s):  
Fred Moseley
Keyword(s):  
World War Ii ◽  
The United States ◽  
Real Wages ◽  
Debt Burden ◽  
The Great Depression ◽  
Us Economy ◽  
United States Economy ◽  
The Us ◽  
Post War ◽  
Rate Of Profit

AbstractIn the first thirty years after World War II, the US economy performed very well. The rate of growth averaged 4—5%, the rate of unemployment was seldom above 5%, inflation was almost non-existent (1—2%), and the living standards of workers improved steadily. These were the ‘good old days'. However, this long period of expansion and prosperity ended in the 1970s. Since then, both the rate of unemployment and the rate of inflation have been much higher than before, and the average real wages of workers (i.e. the purchasing power of wages) have declined some 20%. Productivity growth has also slowed down and the debt burden of both capitalist enterprises and the Federal government has increased dramatically. It is in this sense that we may refer to the ‘economic crisis’ of the US economy over the last two decades. This crisis has certainly not been as severe as the Great Depression of the 1930s, but the economic performance has been significantly worse than in the early post-war period.

World Overview

2011 ◽  
Vol 217 ◽  
pp. F11-F14
Author(s):  
Dawn Holland ◽  
Aurélie Delannoy ◽  
Tatiana Fic ◽  
Ian Hurst ◽  
Ali Orazgani ◽  
...  
Keyword(s):  
Sovereign Debt ◽  
Debt Crisis ◽  
Precautionary Savings ◽  
Gdp Growth ◽  
Real Wages ◽  
Supply Chain Disruptions ◽  
Us Economy ◽  
Moderate Growth ◽  
The Us ◽  
Fiscal Austerity

GDP growth in the OECD group of economies moderated in the first quarter of 2011, reflecting a contraction in output in Japan related to the earthquake in March 2011 and a slowdown in the US economy. This was partly offset by an acceleration of growth in the Euro Area, to some extent attributable to a weather related rebound in Northern Europe, but also a strong rise in business investment in Germany and France. Moderate growth at the OECD level persisted into the second quarter. Supply-chain disruptions continued to affect Japan; the high oil price eroded real wages, exacerbating the effect of high unemployment on consumption in the US; the deepening sovereign debt crisis in Europe raised uncertainty, leading to a rise in precautionary savings even in countries not restrained by severe fiscal austerity programmes. Outside the OECD, China and India continue to drive world growth, although rising inflation points to more moderate prospects in the second half of the year. We forecast global GDP growth of about 4½ per cent per annum in both 2011 and 2012, compared to 5 per cent growth recorded in 2010. The key assumptions underlying this forecast are discussed in Appendix A, with our forecasts for key macro variables in 40 major economies detailed in Appendix B.

scholarly journals Job-to-Job Flows and Earnings Growth

2017 ◽  
Vol 107 (5) ◽  
pp. 358-363 ◽  
Author(s):  
Joyce K. Hahn ◽  
Henry R. Hyatt ◽  
Hubert P. Janicki ◽  
Stephen R. Tibbets
Keyword(s):  
Average Rate ◽  
Job Flows ◽  
Real Wages ◽  
Earnings Growth ◽  
Data Product ◽  
Us Economy ◽  
The Us ◽  
Year 2000 ◽  
The U.S

The US workforce has had little change in real wages, income, or earnings since the year 2000. However, even when there is little change in the average rate at which workers are compensated, individual workers experienced a distribution of wage and earnings changes. In this paper, we demonstrate how earnings evolve in the US economy in the years 2001-2014 on a forthcoming dataset on earnings for stayers and transitioners from the U.S. Census Bureau's Job-to-Job Flows data product. We account for the roles of on-the-job earnings growth, job-to-job flows, and nonemployment in the growth of U.S. earnings.

scholarly journals Policy and Business Cycle Shocks: A Structural Factor Model Representation of the US Economy

2021 ◽  
Vol 14 (8) ◽  
pp. 371
Author(s):  
Mario Forni ◽  
Luca Gambetti
Keyword(s):  
Factor Model ◽  
Supply And Demand ◽  
Aggregate Demand ◽  
Dynamic Factor ◽  
Structural Representation ◽  
Demand Shocks ◽  
Us Economy ◽  
Long Run ◽  
The Us ◽  
Policy Shocks

We use a dynamic factor model to provide a semi-structural representation for 101 quarterly US macroeconomic series. We find that (i) the US economy is well described by a number of structural shocks between two and five. Focusing on the four-shock specification, we identify, using sign restrictions, two policy shocks, monetary and fiscal, and two non-policy shocks, demand and supply. We obtain the following results. (ii) Both supply and demand shocks are important sources of fluctuations; supply prevails for GDP, while demand prevails for employment and inflation. (ii) Monetary and fiscal policy shocks have sizable effects on output and prices, with no evidence of crowding-out of private aggregate demand components; both monetary and fiscal authorities implement important systematic countercyclical policies reacting to demand shocks. (iii) Negative demand shocks have a large long-run positive effect on productivity, consistently with the Schumpeterian “cleansing” view of recessions.

Prospects for Individual Economies

2011 ◽  
Vol 217 ◽  
pp. F15-F24
Author(s):  
Dawn Holland ◽  
Aurélie Delannoy ◽  
Tatiana Fic ◽  
Ian Hurst ◽  
Ali Orazgani ◽  
...  
Keyword(s):  
Oil Price ◽  
Consumer Spending ◽  
Real Wages ◽  
Rate Of Growth ◽  
Us Economy ◽  
The Us

The rate of growth of the US economy moderated in the first quarter of 2011, and remained lacklustre in the second quarter of the year, as the high oil price eroded real wages and weighed on consumer spending. In 2011 as a whole, we expect GDP to expand by 2½ per cent, with an acceleration to nearly 3 per cent expected in 2012.

scholarly journals How to Restore Equitable and Sustainable Economic Growth in the United States

2016 ◽  
Vol 106 (5) ◽  
pp. 43-47 ◽  
Author(s):  
Joseph E. Stiglitz
Keyword(s):  
Aggregate Demand ◽  
Financial Sector ◽  
Carbon Price ◽  
The United States ◽  
Public Infrastructure ◽  
Public Investments ◽  
Us Economy ◽  
The Us ◽  
Sustainable Economic Growth ◽  
Reserve System

Today's weakness in the US economy results from lack of aggregate demand, due to high and growing inequality, underinvestment in public infrastructure and technology that is complementary to private capital, continuing mild austerity, difficulties encountered in making the structural transformation from manufacturing to a service-based economy, and a financial sector failing to provide adequate funds to SMEs. An agenda to restore growth includes a carbon price, inducing climate investments; increased public investments in infrastructure and technology; fighting inequality through redistribution and rewriting the rules structuring the economy; and reforming the financial sector and the global reserve system.

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