Transcript juan_aviles_eco202_milestone1-3

Economic growth: 1960’s
Juan Aviles
ECO 202
Milestone One
Professor
10/3/2015
ECO 202
Introduction
• Real Gross Domestic Product and Growth Rate 1960-1969
• Historical events that impacted the U.S economy during this
period.
i. Great Society Initiative
ii. Tax policies review
• Unemployment and Inflation rate during this period
• Interest rates fluctuations thought 1960-1969 and their
impacts
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Ten-Year Period of U.S. Economic History
Overview
• Real Historical Gross Domestic Product (GDP) and
Growth Rates of GDP 1960-1969
YEAR
1960
1961
1962
1963
1964
1965
1966
1967
1968
1969
Real
GDP
(Billion
s of
2009
dollars ) 3,108.73,188.1 3,383.1 3,530.4 3,734.0 3,976.7 4,238.9 4,355.2 4,569.0 4,712.5
Real
GDP
Growth
Rate
0.86 6.37
4.28
5.18
5.15
8.48
4.51
2.70
4.97
2.07
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Events that impacted the U.S. economy 1960s
• Reviewing of Tax Policies
• Great Society Initiative
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Unemployment and Inflation Rates
between 1960-1969
YEAR
S
1960
1961
1962
1963
1964
1965
1966
1967
1968
1969
INFLA 1.03
TION
RATES
1.71
0.67
1.33
1.64
0.97
1.92
3.46
3.65
4.40
UNE
5.5
MPLO
YMEN
T
RATES
6.7
5.5
5.7
5.2
4.5
3.8
3.8
3.6
3.5
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Interest Rates Fluctuation During the 1960s
DATES
INTERS T RATES %
AUGUST 23, 1960
4.5
December 6, 1965
5
March 10, 1966
5.75
August 16, 1966
6
January 26, 1967
5.75
November 20, 1967
7.6
April 19, 1968
6.5
December 18, 1968
6.8
January 7, 1969
7
March 17, 1969
7.5
June 9, 1969
8.5
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Conclusions
• Gross domestic product is the broadest pointer of
financial development and advancement
• Genuine GDP dependably consider inflation in this
way, permitting correlation against other chronicled
time periods
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Fiscal Policies
Juan Aviles
ECO 202
Milestone Two
Professor
16 OCT 15
ECO 202
Fiscal Policies Adopted by U.S. Government
between 1960-1969
• Adjustments in Business and Personal taxes.
• Government Procurements
• Transfer Payments.
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Adjustments in Business and Personal Taxes
• Revenue Act of 1962.
• Revenue Act of 1964.
• Tax Adjustment Act of 1966.
• Revenue and Expenditure Control Act of 1968.
• Tax Reforms Act of 1969.
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Government spending
Examples of Government expenditures:
 National Defense
 discretionary expenditures
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Transfer Payments
For example:
 Social securities
 Welfare benefits
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Conclusions
• Fiscal policies adopted in 1960s had a positive impact on the
U.S. Economy.
• Since 1960, Government spending continually increased over
the decade.
• Transfer payments expenditure rose sharply in absolute terms
as well as percentage of real GDP from 1960.
• During these period the government kept on reviewing tax
policies as it considered tax as the major tool to control the
economic activities.
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Monetary Policies
Juan Aviles
ECO 202
Milestone three
Professor
26 OCT 15
ECO 202
Monetary policies
 This presentation examines the Monetary Policy in the 1960s, the most
often utilized monetary policy to reinstate the economy.
 Monetary Policy refers to the process where the Federal Reserve attempt
to control the money supply by use of various tools.
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Monetary policy tools
• Instruments that initiate monetary policy.
i.
Open market operations
ii.
Reserve Ratio
iii.
Discount Rates
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Open markets operations
• Refers to the procurement or sales of bonds by the Federal Reserve in the
open market.
• Expansionary policies- the fed purchases the bonds.
• Contractionary policies entails selling of the bonds.
• Stimulation and accommodation policy of 1969.
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Discount rates
• Discount rate is the interest rate charged by federal reserve to banks that
borrow or lend from it.
• For Expansionary policies the discount rates are lowered.
• For contractionary policies the discount rates are raised.
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Reserve ratio
• Designed to change the least aggregate of reserves the bank ought to hold.
• To take expansionary policies the Fed is forced to reduce the reserve
ratio.
• For contractionary policies the Fed increases the reserve ratio.
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References
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Bartlett, B. (2012). The Benefit and The Burden: Tax Reforms. Cambridge : Cambridge
University Press.
Boccia, R. (2014, October 17). Eliminating Waste and Controlling Government Spending.
Retrieved October 13, 2015, from The Heritage Foundation:
http://www.heritage.org/research/reports/2014/10/eliminating-waste-and-controllinggovernment-spending
Boyes, W. J., & Melvin, M. (2013). Economics. Australia : Cengage Learning South-Western.
Furchtgott, D. (2013, November 11). Lesson from John F Kennedy on Tax. Retrieved
September 29, 2015, from Economics21: http://www.economics21.org/commentary/6lessons-jfk-tax-policy
Higgs, R. (2011, February 1). The Economics of the Great Society . Retrieved September 28,
2015, from The Independent Institute: http://www.independent.org/issues/article.asp?id=3157
Interest Rates History. (2008, December 16). Retrieved September 29, 2015, from Fed Prime
Rates: http://www.fedprimerate.com/wall_street_journal_prime_rate_history.htm
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References
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Madura, J. (2014). International financial management. Australia: South-Western.
M.A.Akhtar. (1997). Understanding Open Market Operations. Economics Journal , 25-47.
McEachern, W. A. (2014). Macroeconomics : a contemporary introduction. Mason, OH:
South-Western Cengage Learning.
Meulendyke, A. M. (1998, May 25). U.S. Monetary Policy & Financial Markets. Retrieved
October 24, 2015, from St. Louis Fed Research Organization:
https://research.stlouisfed.org/aggreg/meulendyke.pdf
Musgrave, R. A. (2004). U.S. Fiscal Policy, Keynes and Keynesian Economics. Cambridge:
Cambridge University Publishers.
Tax Legislation 1960-1969. (2014, September 12). Retrieved October 13, 2015, from Tax
Policy Centre: http://www.taxpolicycenter.org/legislation/1960.cfm
The Discount Rate. (2014, December 12). Retrieved October 24, 2015, from Federal Reserve
Bank: http://www.federalreserve.gov/monetarypolicy/discountrate.htm
Timberlake, R. H. (2013, June 3). The Concise Encyclopedia. Retrieved October 24, 2015,
from Federal Reserve System:
http://www.econlib.org/library/Enc/FederalReserveSystem.html
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References
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U.S Department of Commerce. (2014, September 29). BEA National Economic Accounts.
Retrieved September 28, 2015, from Bureau of Economic Analysis:
http://www.bea.gov/national/index.htm#gdp
United State Department of Labor. (2014, June 14). Bureau of Labor Statistics Data.
Retrieved October 29, 2015, from BLS : http://data.bls.gov/pdq/SurveyOutputServlet
Wessels, W. J. (2011). Business and Economics. Hauppauge, NY: Barron's.
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