Research Project: Notes
Source 1: Understanding the global role of the US economy. (2017,
February 27). CEPR.
Notes:
The US economy is the largest in the world, accounting for almost a quarter of global
GDP, one-fifth of global FDI, and more than a third of stock market capitalization.
The US economy has significant global influence, with its performance affecting other
economies' business cycles and recessions .
Changes in US growth and policy shocks have spillover effects on the global economy,
with positive effects on trade partners if not counterbalanced by trade barriers or
tightening of global financing conditions .
Persistent policy uncertainty in the US can hamper global economic growth, particularly
affecting investment growth in emerging market and developing economies.
A percentage-point increase in US growth could boost growth in advanced economies
by 0.8% and in emerging market and developing economies by 0.6% after one year.
The US dollar is the most widely used currency in global trade and financial transactions,
and changes in US monetary policy and investor sentiment play a major role in driving
global financing conditions
Source 2: Publisher, A. R. a. R. O. O. (2016, June 17). 15.1 The Role of
Government in a Market Economy.
Notes:
Producers in a free market economy are private individuals or businesses who supply
goods and services to meet consumer demand.
Consumers in a free market economy are individuals or households who purchase
goods and services from producers based on their preferences and budget constraints.
The government in a free market economy plays a role in addressing market failures and
ensuring fair competition. It intervenes to provide public goods, regulate monopolies, and
address external costs and benefits.
The government may also intervene to promote the consumption of merit goods and
discourage the consumption of demerit goods.
The government may redistribute income through various means, such as means-tested
and non-means-tested transfer programs.
The level of government intervention in the US free market economy is generally limited
compared to economies with more centralized planning.
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Source 3: Dba, D. J. S. (2017, October 29). The Top 10 U.S. Economic
Issues to Monitor. Graziadio Business Review | Graziadio School of
Business and Management | Pepperdine University
Notes:
• The US personal savings rate has collapsed, marking the first negative rate since the
Great Depression.
• The concentration of wealth, a natural result of the concentration of ability, is a significant
trend to monitor.
• The anticipated benefits of Social Security and Medicare exceed individual contributions,
potentially impacting the nation's ability to consume goods and build future economic
growth.
• The federal government debt has increased significantly, posing challenges for
consumption and investment in economic growth.
• The middle class is facing challenges with stagnant incomes and a decline in median
family incomes.
Source 4: Hall, R. E. (2015). Quantifying the Lasting Harm to the US
Economy from the Financial Crisis. NBER Macroeconomics Annual.
Notes:
Strong foundation of free market principles and entrepreneurship.
Benefits from innovation, competition, and flexible labor market.
Diverse range of industries contribute to growth and resilience.
Well-developed financial system supports investment and economic expansion.
Producers have freedom in determining goods and services.
Consumers influence demand based on preferences and purchasing power.
Government provides legal and regulatory framework for fair competition and
macroeconomic stability.
Income inequality, lack of affordable healthcare, and economic downturn impact.
Possible solutions include income redistribution policies, expanding healthcare access,
and financial crisis prevention measures.
Source 5: Corsetti, G., Leduc, S., & Dedola, L. (2014). THE
INTERNATIONAL DIMENSION OF PRODUCTIVITY AND DEMAND
SHOCKS IN THE US ECONOMY. Journal of the European Economic
Association
Notes:
The paper identifies productivity and demand shocks in the US economy and examines
their international propagation through real and financial channels.
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Productivity gains in US manufacturing have significant macroeconomic effects,
including raising US consumption, investment, and the terms of trade relative to the rest
of the world, while lowering US net exports.
Positive demand shocks to US manufacturing also lead to real appreciation and raise
investment, but have limited effects on trade flows.
The paper highlights the role of cross-country endogenous demand and wealth
movements in shaping international macroeconomic interdependence.[1]
The authors propose a novel identification strategy and study the effects of productivity
and demand shocks on 17 variables in the US economy, documenting real and financial
channels of transmission.
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