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United States : [special feature: encouraging environmentally sustainable growth]. 1999-2000. PDF

196 Pages·2000·2.88 MB·English
by  OECD
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« OECD Economic Surveys United States ECONOMICS May 2000 File: $1$DIA3:[PAGER.SAVE.PUB]COPYR–1623E.;8 REGNIER Seq: 1 Page: Free: 4140D Next: 0D VJ: J1:1 6-JAN-00 10:22  OECD, 2000.  Software: 1987-1996, Acrobat is a trademark of ADOBE. All rights reserved. OECD grants you the right to use one copy of this Program for your personal use only. Unauthorised reproduction, lending, hiring, transmission or distribution of any data or software is prohibited. You must treat the Program and associated materials and any elements thereof like any other copyrighted material. All requests should be made to: Head of Publications Service, OECD Publications Service, 2, rue Andre´-Pascal, 75775 Paris Cedex 16, France. OECD ECONOMIC SURVEYS 1999-2000 United States ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT Pursuant to Article 1 of the Convention signed in Paris on 14th December 1960, and which came into force on 30th September 1961, the Organisation for Economic Co-operation and Development (OECD) shall promote policies designed: – to achieve the highest sustainable economic growth and employment and a rising standard of living in Member countries, while maintaining financial stability, and thus to contribute to the development of the world economy; – to contribute to sound economic expansion in Member as well as non-member countries in the process of economic development; and – to contribute to the expansion of world trade on a multilateral, non-discriminatory basis in accordance with international obligations. The original Member countries of the OECD are Austria, Belgium, Canada, Denmark, France, Germany, Greece, Iceland, Ireland, Italy, Luxembourg, the Netherlands, Norway, Portugal, Spain, Sweden, Switzerland, Turkey, the United Kingdom and the United States. The following countries became Members subsequently through accession at the dates indicated hereafter: Japan (28th April 1964), Finland (28th January 1969), Australia (7th June 1971), New Zealand (29th May 1973), Mexico (18th May 1994), the Czech Republic (21st December 1995), Hungary (7th May 1996), Poland (22ndNovember 1996) and Korea (12th December 1996). The Commission of the European Communities takes part in the work of the OECD (Article 13 of the OECD Convention). Publié également en français. © OECD 2000 Permission to reproduce a portion of this work for non-commercial purposes or classroom use should be obtained through the Centre français d’exploitation du droit de copie (CFC), 20, rue des Grands-Augustins, 75006 Paris, France, Tel. (33-1) 44 07 47 70, Fax (33-1) 46 34 67 19, for every country except the United States. In the United States permission should be obtained through the Copyright Clearance Center, Customer Service, (508)750-8400, 222Rosewood Drive, Danvers, MA 01923 USA, or CCC Online: http://www.copyright.com/. All other applications for permission to reproduce or translate all or part of this book should be made to OECD Publications, 2, rue André-Pascal, 75775 Paris Cedex 16, France. Table of contents Assessment and recommendations 9 I. Economic conditions and the maintenance of faster growth 21 The economy’s improved supply-side performance 21 Over-rapid demand growth brings some imbalances 38 The near-term outlook and risks 56 II. Monetary and fiscal management 61 Monetary policy 61 Fiscal policy 71 Medium- and longer-term fiscal projections 83 III. Structural policy developments 89 The social agenda 89 Product market efficiency 103 Commercial and external relations 108 Financial modernisation 114 Summary 123 IV. Encouraging environmentally sustainable growth 125 Environmental policy in historical perspective 125 A brief overview of some major current environmental issues 127 Environmental policy in practice 128 Efficiency and implementation: cost-benefit analysis and the reinvention of regulation 147 Conclusions 152 Notes 159 Bibliography 170 Annexes I. Government-sponsored enterprises 182 II. Calendar of main economic events 193 (cid:127)(cid:127)(cid:127)(cid:127)(cid:127) Boxes 1. The 1999 comprehensive revisions to the national accounts 23 2. Hedonic price indices and chain weighting 30 © OECD 2000 4 OECD Economic Surveys: United States 3. Stock options and their impact on wage measurement andprofitability 46 4. What is the rate of inflation? 54 5. Electronic commerce and tax revenues 82 6. Structural recommendations in this Survey 123 7. Summary of previous structural recommendations 124 8. Cap-and-trade or tax? 132 9. Environmental programmes in agriculture 136 10. Water in the San FranciscoBay delta area 140 11. Summary of conclusions and elements of a reform package 157 Tables 1. The estimated sectoral distribution of hourly labour productivity growth 25 2. Decomposition of productivity movements 28 3. The role of information technology in the growth of output and productivity: an international comparison 33 4. Contributions to GDP growth 38 5. Current account 42 6. Labour market outcomes and compensation 43 7. Financial indicators for Internet companies 52 8. Near-term outlook 57 9. Capital market flows and net asset position 67 10. Credit market debt outstanding by class of borrower 69 11. Growth in monetary aggregates 69 12. General government financial balances and debt 72 13. Federal budgets and outcomes 74 14. Sources of growth in individual income tax liabilities in excess of GDP growth, tax years 1994-98 75 15. The change in the distribution of income by fixed income class, 1994-97 76 16. Change in Federal government spending and revenue 77 17. The Administration's budgetary framework proposals 79 18. Measures of liquidity in the government bond market in five large OECD countries 80 19. Medium-term federal budget projections 83 20. Valuation ranges 151 Annexes A1. Government-sponsored enterprises 183 A2. FHA-eligible mortgage funding borrower and area characteristics 187 A3. Estimated value of implicit government guarantees for Fannie Mae and Freddie Mac 188 A4. Federal credit programmes in 1997 190 A5. Government insurance programmes 190 Figures 1. Aggregate economic indicators 22 2. Labour productivity growth in three extended business cycles 24 3. Growth of the estimated business sector capital stock 25 4. Productivity growth 27 5. Gross and net investment 32 6. Estimated growth rate of potential output 37 7. Net worth of households 39 © OECD 2000 Table of contents 5 8. Growth in real compensation 45 9. Corporate costs and profits 47 10. Profitability indicators for the non-financial corporate sector 48 11. Company borrowing relative to total assets and net worth 49 12. Net financial investment 50 13. Overall stock market price index 51 14. Stock prices in the technology sector 51 15. Inflation performance 53 16. Equity prices and estimated total returns 59 17. Nominal and real overnight rates 62 18. Actual inflation and Federal Reserve expectations 63 19. Bond market yields 65 20. Exchange rates for the dollar 68 21. Financial conditions indicator 70 22. Government expenditures on consumption and gross investment 72 23. Unemployment outcomes 91 24. Income distribution 93 25. Poverty rates 94 26. Minimum wages 96 27. Health insurance and medical costs 100 28. Telephone prices 104 29. Import penetration in the US market 109 30. Anti-dumping and countervailing duty investigations 112 31. Air polluant concentrations 130 32. SO allowance transfers 134 2 33. Carbon dioxide emission intensities, 1997 143 34. Energy intensity and consumption 145 35. Average fuel consumption of light vehicles 146 36. Variation in compliance costs across states 149 © OECD 2000 BASIC STATISTICS OF UNITED STATES THE LAND Area (1 000 sq. km) 9 373 Population of major cities, including their metropolitan areas, July 1996: New York 19 938 000 Los Angeles-Anaheim-Riverside 15 495 000 Chicago-Gary-Lake County 8 600 000 THE PEOPLE Resident population, November 1st 1999 273 866 000 Civilian labour force, 1999 139 368 833 Number of inhabitants per sq. km 29.2 of which: Annual net natural increase Health services 9 972 600 (average 1994-98) 1 599 600 Unemployed 5 876 417 Natural increase rate per 1 000 inhabitants Net immigration (average 1994-98) 6.1 (annual average 1994-98) 906 800 PRODUCTION Gross domestic product in 1999 Origin of national income in 1999 (billions of US$) 9 256.1 (per cent of national income1): GDP per head in 1999 33 797.9 Manufacturing 15.9 Gross fixed capital formation Finance, Insurance and real estate 18.6 Per cent of GDP in 1999 20.3 Services 24.2 Per head in 1999 (US$) 6 849.6 Government and government enterprises 12.8 Other 28.6 THE GOVERNMENT Government consumption 1999 Composition of the 105th Congress (per cent of GDP) 14.4 as of December 7, 1998: Government current receipts, 1999 House of (per cent of GDP) 31.1 Representatives Senate Federal government debt helded Democrats 206 54 by the public (per cent of GDP), FY 1999 39.9 Republicans 228 55 Independents 1 –– Total 435 100 FOREIGN TRADE Exports: Imports: Exports of goods and services Imports of goods and services as per cent of GDP in 1999 10.4 as per cent of GDP in 1999 13.3 Main exports, 1999 Main imports, 1999 (per cent of merchandise exports): (per cent of merchandise imports): Food, feed, beverages 6.5 Food, feed, beverages 4.3 Industrial supplies 21.1 Industrial supplies 21.6 Capital goods 44.7 Capital goods 29.0 Automotive vehicles, parts 10.7 Automotive vehicles, parts 17.5 Consumer goods 11.6 Consumer goods 23.4 1. Without capital consumption adjustment. Note: An international comparison of certain basic statistics is given in an annex table. This Survey is based on the Secretariat’s study prepared for the annual review of the United States by the Economic and Development Review Committee on 15 March 2000. (cid:127) After revisions in the light of discussions during the review, final approval of the Survey for publication was given by the Committee on 21 April 2000. (cid:127) The previous Survey of United States was issued in May 1999. Assessment and recommendations The growth The US economy seems to have shifted to a higher potential potential of the US growth path, having recovered a considerable amount of the economy has dynamism lost in the 1970s and 1980s. It has now been increased expanding continuously for longer, albeit not more rapidly, markedly… than at any time in modern history. Such a durable increase in output is linked to a significant economic transformation. At the aggregate level, trend labour productivity growth has probably doubled from the rate seen in the 20years prior to the mid-1990s, helped by a surge in the capital equipment and software available for each worker. Central to this development has been the extraordinarily robust technical progress in the computer and communications industries. Advances in information technology have resulted in a sharp fall in the price of investment goods, boosting the growth of the capital stock and thus of labour productivity in the high- technology parts of the economy. These gains appear to be spreading into other sectors, and, if the decline in price of investment goods continues, may offer the possibility of maintaining, or even further boosting, the higher overall growth of labour productivity and hence of average real incomes for some time to come. ... but demand has While the economy’s ability to supply goods and services increased even has improved significantly, demand continues to increase more rapidly… even more quickly. Financial markets have anticipated future income gains and capitalised them to a very full extent. Consequently households, as well as benefiting from improved employment prospects and gains in real income, have seen a continuing substantial increase in their net worth. The personal sector has translated a part of this rise into higher consumption, which has accounted for a growing share of domestic demand in recent years. Investment, too, © OECD 2000

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