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

196 Pages·2000·2.88 MB·English

by  OECD

«
OECD
Economic Surveys
United States
ECONOMICS
May 2000
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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
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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