Economic Report of the President

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Box 7-2 — continuedSeveral mechanisms have been suggested by economists aspromising ways to further encourage new research and development inpharmaceuticals. For example, foundations can offer monetary prizesfor vaccine development in order to encourage innovation withoutrestricting competition in the market once the product is developed.However, a prize alone would not ensure access to the vaccine by thosewho need it. Alternatively, a foundation could “buy out” a patent (thatis, it could essentially compensate a firm for letting its patent expireearly). Like a prize, the patent buyout would provide incentives for innovationthat are not tied to the market for purchasing the drug, therebypromoting research and development even in markets of poor patients.However, the buy-out may similarly fail to ensure large-scale access tothe vaccine since there is no guarantee that competition in the vaccine’smarket will be attractive to other producers. Particularly if the vaccine istechnically difficult to produce and if safety regulations areburdensome, firms may not wish to enter the market for a new vaccine.Some scholars have also suggested that another approach to encouragingvaccine research would be for a foundation or group offoundations to make an advance commitment to purchase a vaccine at apre-specified price and quantity. Pharmaceutical firms then would have asecure financial incentive for researching vaccines and treatments, evenif a disease affects predominantly poor populations, and, oncedeveloped, widespread production of the vaccines could be ensured.Despite years of both private and government-sponsored research, an HIVvaccine remains elusive. Although the disease’s many strains and their abilityto evolve rapidly over time present scientific obstacles, there is also reason tobe optimistic that a vaccine will one day be possible. Some candidate HIVvaccines have already been shown to protect monkeys against infection andcould induce immune responses in humans. To enhance coordination ofresearch efforts, the President, with other G-8 leaders, endorsed the establishmentof the Global HIV Vaccine Enterprise and announced plans to establisha second HIV Vaccine Research and Development Center in the UnitedStates. The Administration has also urged fellow G-8 leaders to similarlyexpand their commitment to vaccine development.170 | Economic Report of the President
ConclusionThe United States and countries around the world must continue to fightthe spread of HIV/AIDS, aid those who are suffering as result of theepidemic, and work toward eventual eradication of the deadly disease.Interventions are particularly critical because the far-reaching economicconsequences of HIV/AIDS threaten the well-being of entire societies. ThePresident has developed a generous aid package with the Emergency Plan andwith donations to the Global Fund, and the Administration supports theprotection of intellectual property rights. Many other members of the internationalcommunity have taken action against the HIV/AIDS crisis, and theUnited Nations General Assembly Special Session on HIV/AIDS in 2001 hasaffirmed the international community’s commitment to make progress in thestruggle against HIV/AIDS. Governments, donors, and private enterprisearound the world must continue to build upon the successes of these actionsto win the global fight against AIDS.Chapter 7 | 171
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Economic Reportof the PresidentTran
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C O N T E N T SECONOMIC REPORT OF T
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ECONOMIC REPORT OF THE PRESIDENTTo
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the playing field is level for our
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LETTER OF TRANSMITTALCOUNCIL OF ECO
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Monetary Policy ...................
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Encouraging FDI ...................
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3-4. The Equivalence of Sales Taxes
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Real GDP expanded by 3.7 percent du
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Options for Tax ReformChapter 3, Op
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and better Nation for it. A compreh
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Innovation and the Information Econ
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ecause they do not expect family me
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The Administration has pushed aggre
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C H A P T E R 1The Year in Review a
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Consumer SpendingConsumer spending
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easons for this correlation are dis
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2003, a number of countries that to
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ProductivityRecent productivity gro
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The projected path of inflation as
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strengthen. The forecast is based o
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The growth rate of the economy over
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In sum, potential real GDP is proje
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C H A P T E R 2Expansions Past and
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The behavior of real GDP is similar
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of faltering may be attributable to
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most recent expansions have shown r
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middle of 2003. The more moderate r
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1.2 percent. Employment continued t
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SummaryModerate recessions are foll
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permanent cuts should permanently r
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and the Jobs and Growth Tax Relief
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Federal government revenues had bee
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Fiscal policy played an especially
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C H A P T E R 3Options for Tax Refo
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High Compliance CostsThe complexity
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a reasonable estimate is that a 10
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Excess BurdenBecause taxes distort
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Box 3-3 — continuedThe bottom 40
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more uniform or pure version of the
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of being collected all at once at t
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would have to differ from state tax
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owner claimed it was for business,
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The current set of saving incentive
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the current system. In addition, so
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C H A P T E R 4ImmigrationIn recent
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TABLE 4-1.— Foreign-Born Share of
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immigrants (also called illegal or
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largest group of immigrants was bor
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employment costs, including wage fl
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Chapter 4 | 103
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wages fall in response to immigrati
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immigrants from Latin America do re
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addition, as migrants leave the cou
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include siblings and adult children
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despite the tremendous growth in th
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The TWP would allow new foreign wor
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C H A P T E R 5Expanding Individual
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Page 129 and 130: Box 5-2: The Benefits of Land Title
Page 131 and 132: development plan designed by others
Page 133 and 134: C H A P T E R 6Innovation and theIn
Page 135 and 136: E-mail is the most common online ac
Page 137 and 138: Changed circumstances, such as new
Page 139 and 140: Illegal Acts on the InternetThe Int
Page 141 and 142: or develop new markets, which can l
Page 143 and 144: inflation factor for the price cap
Page 145 and 146: U.S. households connecting to local
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Page 153 and 154: C H A P T E R 7The Global HIV/AIDS
Page 155 and 156: Chart 7-1 Estimated HIV Infection L
Page 157 and 158: There is no cure for HIV/AIDS, thou
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Page 165 and 166: Box 7-1 — continuedfocused on the
Page 167: Box 7-2 — continuedenhancing coor
Page 171 and 172: Good Two. In Ricardo’s simple mod
Page 173 and 174: The Impact of Trade on Labor Market
Page 175 and 176: The U.S. Advantage in Services Trad
Page 177 and 178: U.S. firms is associated with a cor
Page 179 and 180: anked the second-best country out o
Page 181 and 182: the Chinese government agreed to el
Page 183 and 184: Trade LiberalizationTariffs and oth
Page 185 and 186: ConclusionThe United States is the
Page 187 and 188: LETTER OF TRANSMITTALCOUNCIL OF ECO
Page 189 and 190: Report to the President on theActiv
Page 191 and 192: The Council continued its efforts t
Page 193 and 194: The Staff of the Council of Economi
Page 195 and 196: John List and Ted Gayer provided co
Page 197: Appendix BSTATISTICAL TABLES RELATI
Page 200 and 201: PageB-32. Gross saving and investme
Page 202 and 203: PageB-94. Relation of profits after
Page 204 and 205: NATIONAL INCOME OR EXPENDITURETABLE
Page 206 and 207: TABLE B-2.—Real gross domestic pr
Page 208 and 209: TABLE B-3.—Quantity and price ind
Page 210 and 211: TABLE B-5.—Contributions to perce
Page 212 and 213: TABLE B-6.—Chain-type quantity in
Page 214 and 215: TABLE B-7.—Chain-type price index
Page 216 and 217: TABLE B-8.—Gross domestic product
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TABLE B-10.—Gross value added by
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TABLE B-12.—Gross domestic produc
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TABLE B-13.—Real gross domestic p
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TABLE B-14.—Gross value added of
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TABLE B-16.—Personal consumption
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TABLE B-18.—Private fixed investm
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TABLE B-20.—Government consumptio
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TABLE B-22.—Private inventories a
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TABLE B-24.—Foreign transactions
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TABLE B-26.—Relation of gross dom
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TABLE B-28.—National income by ty
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TABLE B-29.—Sources of personal i
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TABLE B-30.—Disposition of person
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Year or quarterTABLE B-32.—Gross
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TABLE B-33.—Median money income (
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TABLE B-35.—Civilian population a
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TABLE B-36.—Civilian employment a
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TABLE B-38.—Unemployment by demog
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TABLE B-40.—Civilian labor force
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TABLE B-42.—Civilian unemployment
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TABLE B-44.—Unemployment by durat
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TABLE B-46.—Employees on nonagric
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TABLE B-47.—Hours and earnings in
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Year orquarterTABLE B-49.—Product
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PRODUCTION AND BUSINESS ACTIVITYTAB
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Year ormonthTABLE B-53.—Industria
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Year or monthTABLE B-55.—New cons
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TABLE B-57.—Manufacturing and tra
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TABLE B-59.—Manufacturers’ new
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Year ormonthTABLE B-61.—Consumer
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TABLE B-62.—Consumer price indexe
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TABLE B-64.—Changes in consumer p
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TABLE B-65.—Producer price indexe
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TABLE B-67.—Producer price indexe
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TABLE B-68.—Changes in producer p
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TABLE B-70.—Components of money s
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TABLE B-71.—Aggregate reserves of
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TABLE B-73.—Bond yields and inter
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TABLE B-74.—Credit market borrowi
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TABLE B-75.—Mortgage debt outstan
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TABLE B-77.—Consumer credit outst
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TABLE B-79.—Federal receipts, out
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TABLE B-81.—Federal receipts, out
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TABLE B-83.—Federal and State and
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TABLE B-85.—State and local gover
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End of yearor monthTABLE B-87.—U.
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End of monthTABLE B-89.—Estimated
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TABLE B-91.—Corporate profits by
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TABLE B-93.—Sales, profits, and s
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YearComposite(Dec. 31,2002=5,000) 3
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YearAGRICULTURETABLE B-97.—Farm i
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TABLE B-99.—Farm output and produ
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Year ormonthTABLE B-101.—Agricult
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INTERNATIONAL STATISTICSTABLE B-103
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TABLE B-104.—U.S. international t
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TABLE B-106.—U.S. international t
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TABLE B-108.—Industrial productio
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TABLE B-110.—Foreign exchange rat
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TABLE B-112.—Growth rates in real
show all

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