Macroeconomic Goals 2013

oppositemincedΔιαχείριση

28 Οκτ 2013 (πριν από 4 χρόνια και 14 μέρες)

126 εμφανίσεις

Macroeconomic Goals

How are we doing? (Survey 2011)

Common Goals for all Economies


Full Employment



Economic Growth



Stable Prices


I. Full Employment


Goal: 5
-
6 percent unemployment


“Full” employment means hitting the long
-
run
average, called the
target, or natural rate
of
unemployment. (5
-
6 percent)


In order for unemployment to decrease 1 one
percent, the economy must grow an extra 2
percent. (
Okun’s rule of thumb
)



The current rate of unemployment is . . .

Full Employment (cont’d.)

About 7.8 percent. (December 2012)


At the current rate of growth, it will take

3+ years to return to the long
-
run natural
rate of unemployment.

Unemployment November 2011

Unemployment in Other Countries

Unemployment in Other Countries, cont’d

II. Economic Growth


Goal: 3 percent growth



Measured by tracking the changes
in
Gross Domestic Product (GDP)
.



Current rate of GDP growth is less
than 2 percent (2012)

III. Stable Prices


Goal:

<
3 percent

inflation rate

how is
it measured?


Different indexes:


CPI


PPI


GDP deflator


NOTE: The Federal Reserve goal is 2
percent inflation

Inflation Rate 2000
-

2010


More Recent Inflation Rates

Three Questions . . .

1.
What macroeconomic goals are all
economies trying to achieve?


2.
In the U.S., what are the “ideal”
target numbers for those goals?


3.
In which of the goals is the U.S.
currently operating closest to, and
farthest from its target levels?