Conventional Wisdom #5 Government spending stimulates the economy. 1.

Slides:

Advertisements

Similar presentations

An activity for “The ABCs of GDP”

Advertisements

DataPost GDP Measuring the Economy Date last updated: February 19, 2015 Federal Reserve Bank of San Francisco Economic Education Group.

Presented by: David Crowe – Chief Economist October 25, 2013 Lee County, Florida Home Building Impact in Lee County, Florida.

Is the US Headed for Another Economic Crisis?. Specific Topics 1) Is the Banking Sector Stable? 2) Are State and Local Governments Solvent? 3) How Serious.

Economy and Revenue Forecast "What's in Store for the FY 2016 DC Budget?" Presentation to the DC Fiscal Policy Institute March 19,2015 Steven Giachetti:

Can Vermont Afford to Grow Old? Prepared for Conference on Shaping America’s Fiscal Future Art Woolf August 19, 2010.

Perspectives on U.S. and Global Economy Houston Region Economic Outlook Houston Economics Club and Greater Houston Partnership Omni Houston Hotel December.

Financial Health of the Government.

W. P. Carey School of BusinessSlide 1 Economic Forecasting.

Agricultural Economics Economic Outlook 2010 Craig Infanger October 2009.

National Finances March 27, Nations’ Financial Positions A nation’s financial position can be understood both in absolute terms and in terms relative.

The Importance of Economic Census Data for Federal Policy Katharine G. Abraham Member, Council of Economic Advisers Hi-Beams for the Economic Road Ahead.

WHAT’S IN GDP? An activity for “The ABCs of GDP” (Extra Credit Spring 2009)

Economic Update Kevin Lings Economist November 2013.

DataPost Federal Reserve Bank of San Francisco Economic Education Group Government Spending Measuring Federal Expenditures Date last updated: May 11, 2015.

Monetary Policy & Aggregate Demand Chapter  Expansionary monetary policy is monetary policy that increases aggregate demand.  Contractionary monetary.

Circular Flow Chapter 2-3.

The Great Economic Unraveling of : Impacts on the U.S. and Texas Bernard L. Weinstein, Ph.D. Cox School of Business Southern Methodist University.

Budget, debt and economic policies. What are the main sources of income and expenditures for the goverment in Canada? Sources of income: -Taxes (individual.

Today’s Economic Situation: The Great Recession, The Recovery, Where We (May Be) Going? Principles of Macroeconomics 7/20/12.

Gross Domestic Product & Growth Ch 12 National Income Accounting Because of the Great Depression, economists felt they needed to monitor our economy,

1 Coping With The Limits of Macroeconomic Policy The Recovery from the Great Recession In this presentation National forecasts are produced by Global Insight,

The Economic Crisis and the Fiscal Crisis: 2009 and Beyond Alan Auerbach and William Gale.

Peterson-Kaiser Health System Tracker How has U.S. spending on healthcare changed over time?

1 The Economic Outlook for Connecticut Rae D. Rosen Senior Economist and Assistant Vice - President Federal Reserve Bank of New York September 9, 2004.

economic indicator  Statistics about the economy that allows analysis of economic performance and predictions of future performance.  Usually calculated.

© 2012 Cengage Learning. Residential Mortgage Lending: Principles and Practices, 6e Chapter 3 Role of Residential Mortgage Lending in the Economy.

Economics: Chapter 13 Measuring the Economy’s Performance.

Chapter 7- National Income Accounting Distribution of GDP 1.

C h a p t e r sixteen © 2007 Prentice Hall Business Publishing Essentials of Economics R. Glenn Hubbard, Anthony Patrick O’Brien Prepared by: Fernando.

Paul and Manny.  “the action taken by the government to address a particular public issue” (John’s Hopkins University)  Includes a wide variety of issues-

DataPost Personal Saving Rate Delayed Consumption Federal Reserve Bank of San Francisco Economic Education & Outreach Date last updated: September 8, 2015.

Federal Deficit Federal Debt Leads to a larger $15.4 Trillion.

DataPost Personal Saving Rate Delayed Consumption Federal Reserve Bank of San Francisco Economic Education Group Date last updated: September 8, 2014.

1.What is GDP? 2.What does GDP measure? 3.Which is more useful when comparing a nation’s income from one year to the next, nominal or real GDP? 4.Why should.

Copyright Campbell R. Harvey. All Worldwide Rights Reserved. 1 The Financial and Economic Impact of September 11, 2001 Campbell R. Harvey Duke University,

Copyright © 2010 Cengage Learning 36 The Causes of the Financial Crisis.

1 Conventional Wisdom versus The Data August 22, 2011 copies of this presentation can be found at

Macroeconomic Issues The Great Recession: GDP begins to drop Shaded area = recession.

The U.S. Economy, 2007 – Today: Collapse, Stimulus, Austerity, “Recovery” Robert Pollin Department of Economics and Political Economy Research Institute.

Economic Outlook Orlando, FL January 11 th, 2011.

WHAT’S IN GDP? An activity for “The ABCs of GDP” (Extra Credit Spring 2009)

The Recovery from the Great Recession In this presentation National forecasts are produced by Global Insight, Inc. State and Metropolitan forecasts are.

Do Now: Why do governments borrow money? Relate government savings to the loanable fund market?

The Federal Reserve Fiscal Policy - Using taxes and spending to help the economy grow. Monetary Policy - Policy that involves changing the rate.

Monetary Policy. Monetary Policy = it refers to what the Federal Reserve does to influence the amount of money and credit in the economy. What happens.

WHAT’S IN GDP? From the Federal Reserve Bank of Atlanta.

The Great Recession In Charts September, 2013 Professor Robert Kaulfuss Prof. of Economics Middlesex Community College BeyondEconomics.org.

Chapter 8- Measuring Total Production & Income Distribution of GDP 1.

 =   –  + ++= = = = = CALCULATING FEDERAL INCOME TAX Lesson 25-3, page 647.

How much are we producing and buying????. total value of all the goods and services produced in a country in a year.  This is one way to measure a country’s.

Monetary Policy Tools Describe how the Federal Reserve uses the tools of monetary policy to promote price stability, full employment, and economic growth.

VRMCA 2014 Annual Meeting VA Beach, September 9 “ Economic and Political Forecast” Daniel Palazzolo Professor of Political Science University of Richmond.

DataPost GDP Measuring the Economy Federal Reserve Bank of San Francisco Economic Education Group Date last updated: September 8, 2014.

| Federal finances Economy 2026: Federal budget surplus/deficit

Home Building Impact in Lee County, Florida

GDP Measuring the Economy

GDP Measuring the Economy

Personal Saving Rate Delayed Consumption

Personal Saving Rate Delayed Consumption

Money And Banking BE220 Ahmed Alharbi.

NOV - Handouts November 19, 2009

What’s on the ppt? Chapters 16 – NC 18

Measuring the Economy’s Performance

Chapter 15 Financial Instability and Economic Inequality.

Personal Saving Rate Delayed Consumption

Personal Saving Rate Delayed Consumption

GDP Measuring the Economy

CUSTOM INTELLIGENCE SERVICES

Presentation transcript:

Conventional Wisdom #5 Government spending stimulates the economy. 1

TARP = $356 b. Stimulus = $578 b. Federal Reserve = $1,500 b. Financial Initiatives = $366 b. Housing Initiatives = $130 b. Data source: Total (net) stimulus = $3 trillion 2

Historically, how has the economy reacted to stimulus spending? 3

Stimulus Spending and Economic Growth If stimulus spending worked, we should see a relationship like this: 4

Data source: Bureau of Economic Analysis, National Income and Product Accounts Increased government spending does not appear to increase economic activity. Stimulus Spending and Economic Growth ( to ) 5

Maybe stimulus spending doesn’t have an immediate effect. What is the effect over time? 6

Data source: Bureau of Economic Analysis, National Income and Product Accounts Increased government spending does not appear to increase economic activity one year in the future. Stimulus Spending and Economic Growth ( to ) 7

Data source: Bureau of Economic Analysis, National Income and Product Accounts Increased government spending does not appear to increase economic activity two years in the future. Stimulus Spending and Economic Growth ( to ) 8

Maybe stimulus spending’s effects are cumulative. What is the cumulative effect? 9

Data source: Bureau of Economic Analysis, National Income and Product Accounts Increased government spending appears to have a negative cumulative effect over 8 quarters. Stimulus Spending and Economic Growth ( to ) 10

11 Data:The Keynes-was-wrong-and-that’s-why-we-don’t- teach-him-anymore Rule: On average, government spending suppresses the economy. Conventional Wisdom #5 Government spending stimulates the economy.