1. Economic History Analysis 1990’s
Chrystal Kitowski
ECO 202
Final Project
Choose a title for your presentation.
Include your name, the course name and the assignment name.

2. Ten-Year Period of U.S. Economic History Overview
is the decade selected
was considered a early recession
After 1995 breaking expansion record of 1960s, the economy grew fast (Tulane, 2002)
New Economy & Greenspan (Freedman, 2002)
By the end of the decade the nation experienced, the dot-com bubble & Internet accumulative growth.
We had a rising GDP, lower unemployment rates along with inflation rates stabilizing.
The period from July 1990 to March 1991 was considered an early recession there fore the growth was very slow during this time. By mid 1990s the economy saw a pick up in growth. The real gross domestic product (GDP) rose above 4% per annum followed by an accelerated productivity growth rate. Towards the end of this decade too, the country experienced radical growth because unemployment rate fell down below 5% in 1997 (Kotz, 2002). The inflation rate remained stable during this time period.
These indicators suggested that the time frame of was quite health for the U.S economy and it broke its own expansion records of 1960s (Presidency Report, 2001). Kotz (2002) further suggested that these successful statistics were obtained after the implementation of neoliberal restructuring policies by the U.S government. Some economists claim that a New economy was created with a combination of latest technologies, new financial laws and elimination of old trade-offs. Overall, the economy between proved to be highly stable, vigorous and sustainable.

3. GDP CONT. (Inflation and CPI Consumer Price Index 1960-1969, n.d.)
By the end of the 1990s the GDP rose over 4200 Billion from The success according to Kotz (2002) was because business were investing more into the economy and consumers were smart when spending. US was importing more goods than exporting. To break it down the price of something has almost doubled from 1990 to Inflation iswhen the price or coat of something goes up. Getting more bang for your buck is a term that is used a lot.
Nearing the turn of the century GDP was 4%. Increase the consumer spending you will increase the GDP. Each year the consumer spending would increase by a steady 4.9%.
(Inflation and CPI Consumer Price Index , n.d.)

4. Unemployment and Inflation
Notice in the year 1991 we fell on the negative side of growth and that was because this was part of the early recession, growth was very weak and over 1.5 million jobs were lost.
In 1999 the unemployment rate was at 4.2% Wages had increased by 7.4% from million jobs were created between the years 1993 and With wages increasing and unemployment rates staying low this helped to contribute to the growth of the economy and most importantly the poverty levels decreased.
By having a low unemployment rate this triggered a upraise in inflation by the end of the decade.
( U.S. Real GDP - annual growth rate | Timeline, n.d.)

5. INTEREST RATES
Due to the early recession of Interest rates were very low 4-5%to help promote growth. Soon after the recession the interest rates started to grow there was no money to invest from just anyone only the investors with money could. As the economy gained strength more people could invest money. There was a government shutdown from that caused the FED to control the money supply. Interest rates were low in the early 90s, but started to raise towards the Century mark.
(U.S. Real GDP - annual growth rate | Timeline, n.d.)

6. Interest rates
Inflation began reducing in the 80s, the U.S. interest rate was 10%
Early 90s the interest rate fell to 3-6%.
By the end of the decade the interest rate was 8.5%. (“Economics history of the United States-Wikipedia free encyclopedia,” n.d.)
Federal Reserve raised interest rates 3% to 6% in 1994
Prevented inflation from rising because of 2 government shutdowns that slowed the economy. (Average Annual Inflation Rate by Decade, n.d.)
 The government had shutdown in because the White House and congress couldn’t agree on a budget. President Clinton wanted to cut spending and raise taxes for higher incomes. The Balanced Budget and Taxpayer Relief Act was a spending bill and a tax bill was a shot at eliminating the annual budget deficit by Both of these were sifned by president Clinton well before 1997.

7. Interest Rates FED targets throughout the 1990s reduced the real wage.
New Economy, productivity, and real wages.
With the unemployment rate falling and low inflation rates this allowed for this decades economic standing to be looked at by many as outstanding.
Monetary policy controlled one or more of the nominal rates, (Freedman, 2002).
After the recession a New Economy formed. The American workers were more educated and was reaping the benefits of the job openings and wages. By having very low unemployment this helped raise the real wage up. Coming out of the recovery from the recession employees can bargain for higher wages. By the end of 1997 productivity profits were still raising from corporations and real wages were moving slowly. (“Restating the 90s-Bloomberg Business, “ 2002)

8. cont.
The Dot com bubble would jump start the economy beginning in late 1995.
1996 had steady growth
May 1997 reported unemployment fell below 5% since 1973 (“Economics history of the United States-Wikipedia free encyclopedia,” n.d.).
Growth, Employment, and inflation all looked good as the 90s continued.
By March 2000, the market would give back some 50% to 75% of the growth of the 1990s. (“Economics history of the United States-Wikipedia free encyclopedia,” n.d.)
Interest rates were high in the early 90s and fell by the end.

9. Inflation & Productivity Growth

10. Federal (Mankiw,2001) Unemployment & Growth (Mankiw (Mankiw, 2001)

11. Former Fiscal Policies in US
The economy of the United States before the recession recovery was the lack of employment avenues (Boyes & Melvin, 2013)
The level of unemployment was alarming
 Restricting the government expenditure on consumer goods
 Advocating for the private investment a little of the government spending all at once
Fiscal’s policy restricting the government expenditure on consumer goods. Poor money circulation leads to poor economic growth.

12. Reasons for adopting new Policies
Wanted to aim at lowering unemployment rates
Adopting new fiscal policy meant working overtime in the short run to stabilize the economy.
Raises taxation higher income, no increase for the lower or middle classes
The economy average annual rate of 3.2 percent in inflation adjusted terms(Foster, 2008)
Employment was up by 11.6 million jobs (Foster, 2008)
Total market capitalization of the S&P 500 rose 95 percent. (Foster, 2008)

13. Tax cut Graph of 1990s (Foster, 2008)
On average the economy’s real growth was 4.2 percent per year from 1997 to 2000.This is a full percentage point higher than during the expansion following the 1993 tax hike. (Foster, 2008) Jobs increased by another 11.5 million, which is similar to the job growth in the previous four-year period. (Foster, 2008) Wages rose at 6.5 percent, which is much stronger than the 0.8 percent growth of the preceding period. (Foster, 2008) The period from 1997 to 2000 forms the memory of the booming 1990s, and it followed the passage of tax relief that was originally opposed by President Clinton. (Foster, 2008)
(Foster, 2008)

14. Impact of Policies
The unemployment phenomenon was now going down a characteristic that was now reducing the impact on the economy
Led to expansion of productivity in the country during this point of time
By integrating the new fiscal policies and data in the economy it has great positive feedback as new avenues are arising and creating more viable environments for growing economically.
The fiscal policies that followed the recession recovery were now reducing the rate at which unemployment was occurring. The power of providing job opportunities is vital to any economy. The struggle of individual in a weak economy to access job is a main setback to the economy development.
 To conclude it is clear that the rate at which the economy was growing, the conservatism policies in the economy would elevate the economy even higher.

15. Monetary Policy
Alan Greenspan was the chairman of the FED in 1987 (Outline of the U.S. Economy, n.d.)
Monetary Policies were are always changing in the 90s because of the market crash of 1987 (Nesvisky, n.d.)
American Economy was more productive due to the microprocessor, the laser, fiber-optics, and satellite. (Outline of the U.S. Economy,n.d.)
In 1990 reserve requirements averaged about 10 percent of checkable deposits.
the maximum capital gains rate was trimmed to 20 percent from 28 percent in (Outline of the U.S. Economy, n.d.)
FED rate dropped from 7.5% to 6.75%
FED discount raised 5.5% to 6%.
Emphasis was to use the Nominal exchange rate to help boost the Economy
In the 90s the change from the President Bill Clinton Era was good for the economy. Jobs were created and the with technology advancing the economists never thought fo rthe 90s to be as good as they were. (Nesvisky, n.d.)

16. Policy Actions Gulf War started in August
Oil prices escalated from$15 to $35 a barrel.
Supply & Demand shocks resulted in the recession of 1991.
Troops left Kuwait
Monetary Policies didn’t stop the shocks or war that they intended to do.
Monetary Policies had little impact on economy.
Beginning of War FED rate was 8%, at the end it was 6%. (Nesvisky, n.d.)
End of the 1991 the rate was down to 4%, then down to 3% by the following October. (Nesvisky, n.d.)

17. Policy Actions 1994 economy was strong
Federal Funds started to raise from 3% to 6% from the Feds.
Unemployment fell
Real GDP increased
Dot com bubble didn’t have that impact on the economy liked the government hoped for.
FED altered rapid Open market operations through repurchase agreements and sale-purchase agreements.
Short term rates rose as well. The real GDP grew 4% and unemployment fell 1%. End of the decade GDP rose 4.7% in 3rd quarter and 8.3% in 4th quarter. By the end Feds raised federal funds to 6.5%. The rise in the GDP didn’t last long though. (Outline of the U.S. Economy,n.d.)

18. Macroeconomic Effects
Changes in inflation caused FED to act quickly by alternating interest rates. (Nesvisky, n.d.)
Volatility and unemployment was at its lowest.
Employment, inflation, and growth of economy was looking good.
By reducing the real wages this increased productivity.
Luck played a huge role in the 90s. Inflation was reduce to 4% in the 1980s but fell even lower in the 1990s. By putting the monetary policies of the 90s in place this why umemployment was able to fall to its lowest in years. (Outline of the U.S. Economy,n.d.)

19. References
Average Annual Inflation Rate by Decade. (n.d.). Retrieved from
Boyes, W., & Melvin, M. (2013). Macroeconomics. Mason, OH.: South Western.
Foster, J. D. (2008, March 4). Tax Cuts, Not the Clinton Tax Hike, Produced the 1990s Boom. Retrieved from
Freedman, C. (2002). Monetary Policy in the 1990’s: Lessons and Challenges. Journal of Economics
Goodfriend, M. (2002). The phases of U.S Monetary Policy. Economic Quarterly
Kincaid, J., & Shah, A. (2007). The practice of fiscal federalism. Montreal: Published by McGill-Queen's University Press.
Mankiw, G. (2001). U.S. Monetary Policy During the 1990s.
Presidency Report, 2001, ‘Economic Report of the President,’ Transmitted to the Congress, Accessed on 7th April, 2015
Tulane, 2003, ‘The Interaction between the Interest Rate and GDP,
World Bank Data, 2015, ‘Real Interest Rate,’ Accessed on 7th April, 2015
Inflation and CPI Consumer Price Index (n.d.). Retrieved from
U.S. Real GDP - annual growth rate | Timeline. (n.d.). Retrieved from

20. References
Nesvisky, M. (n.d.). U.S. Monetary Policy During the 1990s. Retrieved from
Outline of the U.S. Economy. (n.d.). Retrieved from