Economic Report of the President

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The Chairman actively participated during the early months of theyear, and then during the late fall budget cycle, in Cabinet level reviewsof agency budget requests and appeals.MICROECONOMIC POLICIESA wide variety of microeconomic issues received Council attentionduring the year. Council Member Niskanen chaired Cabinet Councilworking groups dealing with employee pension legislation and alternativesto Federal regulation. Trade issues were an area of continuingattention.The Council assisted in the preparation of agency guidelines forimplementing Executive Order 12291 dealing with Executive Officereview of agency regulatory proposals, and worked closely with theOffice of Management and Budget on selected regulatory issues.PUBLIC INFORMATIONThe Council's Annual Report is the principal medium through whichthe Council informs the public of its work and its views. It is also animportant vehicle for presenting and explaining the Administration'sdomestic and international economic policies. Distribution of theReport in recent years has averaged about 50,000 copies. The Councilalso assumes primary responsibility for the monthly Economic Indicators,a publication prepared by the Council's Statistical Office, underthe supervision of Catherine H. Furlong. The Joint Economic Committeeissues the Indicators, which has a distribution of approximately10,000 copies. Information is also provided to members of the publicthrough speeches and other public appearances by the Chairman,Members, and staff economists of the Council.ORGANIZATION AND STAFF OF THE COUNCILOFFICE OF THE CHAIRMANThe Chairman is responsible for communicating the Council'sviews to the President. This function is carried out through directconsultation with the President and through written memoranda andreports on economic developments and on particular programs andproposals. The Chairman exercises ultimate responsibility for directingthe work of the professional staff. He represents the Council atmeetings of the full Cabinet and the various Cabinet Councils, andthe Trade Policy Committee.COUNCIL MEMBERSThe two Council Members are responsible for all subject mattercovered by the Council, including direct supervision of the work ofthe professional staff. Members represent the Council at a wide vari-152
ety of interagency and international meetings and assume major responsibilityfor selecting issues for Council attention.In practice, the small size of the Council permits the Chairman andCouncil Members to work as a team in most circumstances. Therewas, however, an informal division of subject matter among them in1982. Mr. Jordan and subsequently Mr. Poole, assumed primary responsibilityfor domestic and international macroeconomic analysis,economic projections, and monetary and financial issues. Mr. Niskanenis primarily responsible for microeconomic and sectoral analysis,international trade questions, and regulatory issues.PROFESSIONAL STAFFAt the end of 1982 the professional staff consisted of the SpecialAssistant to the Chairman, who also acts as staff director, the SeniorStatistician, a domestic policy economist, an international policyeconomist, 12 senior staff economists, 3 staff economists, and 6junior staff economists.The professional staff and their special fields at the end of 1982were:Eric I. HemelSpecial Assistant to the ChairmanLawrence H. Summers Domestic Policy EconomistPaul R. Krugman , International Policy EconomistSenior Staff EconomistsLincoln F. AndersonGeoffrey O. CarlinerDaniel J. FrischDavid R. HendersonThomas J. KniesnerEvan R. KwerelThomas S. McCalebStephen K. McNeesGlenn L. NelsonAdrian W. ThroopRobert S- VillanuevaBenjamin ZycherCatherine H. FurlongEconomic ForecastingInternational TradeTaxation and Social Insurance ProgramsHealth Policy and Social Insurance ProgramsLabor and Employment PolicyRegulatory Policies and Natural ResourcesTaxation and Public FinanceMacroeconomic PolicyAgricultural PolicyMonetary Policy and Financial RegulationCurrent Economic Conditions, Housing, andEconomic ForecastingEnergy Policy and RegulationStatisticianSenior StatisticianStaff EconomistsLawrence B. Lindsey Taxation and Public FinanceN. Gregory Mankiw Macroeconomic Policy and Public FinanceRobert H. MeyerLabor and Employment Policy153
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CONTENTSPageECONOMIC REPORT OF THE
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ECONOMIC REPORT OF THE PRESIDENTTo
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Monetary policy will play a critica
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Interest Rates and the U.S. Trade D
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THE ANNUAL REPORTOF THECOUNCIL OF E
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CONTENTSPageCHAPTER 1. FROM RECESSI
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PageConclusions 122CHAPTER 6. REVIE
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CHAPTER 1From Recession to Recovery
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slowed somewhat in the 1970s regard
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nal GNP growth is reflected in a sl
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inflation. More specifically, the A
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inflation rate, or with a 12 percen
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1988, an increase of about one-four
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CHAPTER 2The Dual Problems of Struc
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frequently associated with poor hea
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Chart 2-2Distribution of Unemployme
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Chart 2-4Distribution of Unemployme
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These findings suggest several conc
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Wage RigidityA number of studies sh
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that these measures may have caused
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Most young people find jobs or leav
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to employers who hire youths. Tax c
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defined broadly to include individu
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ship between incomplete experience
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CHAPTER 3The United States in the W
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with 2.6 percent in the other Organ
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TABLE 3-1 .—Structure ofthe U.S.
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TABLE 3-2.—Trade balances by comm
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concentrate on doing what it does r
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the United States will depress pric
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Chart 3-3Real Exchange Rates Of Maj
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AN UNDERVALUED YEN?The explanations
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arily reduced the international com
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nancial markets. These transactions
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TABLE 3-6.—Economic performance b
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were undoubtedly a highly favorable
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of lenders that some debtors will n
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CHAPTER 4Increasing Capital Formati
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ate of net investment was required,
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able share in Japan and 56 percent
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During the 1970s, productivity grow
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MEASURING NATIONAL SAVINGDomestic s
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TAX RULES AND PERSONAL SAVINGMany e
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on consumption taxation might also
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Nevertheless, a number of economic
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tion permitted businesses to deprec
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A final problem under current tax l
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fleeted efforts to deal with proble
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egulation was probably not applicab
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Page 109 and 110: system resulted. Price controls, wh
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Page 115 and 116: nications industries through the re
Page 117 and 118: Several major pieces of legislation
Page 119 and 120: tempt to set cartel rates would be
Page 121 and 122: computer information and advertisin
Page 123 and 124: of computer technology to the payme
Page 125 and 126: trend by widening the sources and u
Page 127 and 128: changes. That is, members can arbit
Page 129 and 130: ceived to be a consequence of exces
Page 131 and 132: lowest point in the post-World War
Page 133 and 134: ing. Partly in response to the drop
Page 135 and 136: Chart 6-3Ratio of Consumer Installm
Page 137 and 138: Chart 6-4RATIO1.85Real Inventory/Sa
Page 139 and 140: percent increase in real defense pu
Page 141 and 142: 8.8 percent in 1981. These declines
Page 143 and 144: housing. Borrowing by the nonfinanc
Page 145 and 146: orous competitor for credit as usur
Page 147 and 148: 1982 their share had risen to over
Page 149 and 150: TABLE 6-9.—Economic outlook for 1
Page 151: A critical element in achieving hea
Page 155 and 156: LETTER OF TRANSMITTALCOUNCIL OF ECO
Page 157: Report to the President on the Acti
Page 161: ence J. Kotlikoff (Yale University)
Page 165 and 166: CONTENTSNATIONAL INCOME OR EXPENDIT
Page 167 and 168: B-70. Mortgage debt outstanding by
Page 169 and 170: NATIONAL INCOME OR EXPENDITURETABLE
Page 171 and 172: TABLE B-2.—Gross national product
Page 173 and 174: 19291933193919401941194219431944194
Page 175 and 176: TABLE B-5.—Changes in GNP and GNP
Page 181 and 182: TABLE B-ll.—Gross national produc
Page 183 and 184: TABLE B-13.—Output, costs, and pr
Page 185 and 186: TABLE B-14.—Personal consumption
Page 187 and 188: TABLE B-16.—Gross and net private
Page 189 and 190: TABLE B-18.—Inventories and final
Page 191 and 192: TABLE B-20.—Relation of national
Page 193 and 194: TABLE B-21.—National income by ty
Page 195 and 196: TABLE B-22.—Sources of personal i
Page 197 and 198: TABLE B-24.—Total and per capita
Page 199 and 200: Year or quarterTotalTotalTABLE B-26
Page 201 and 202: POPULATION, EMPLOYMENT, WAGES, AND
Page 203 and 204: TABLE B-29.—Noninstitutional popu
Page 205 and 206: TABLE B-31.—Selected employment a
Page 207 and 208: TABLE B-33.—Civilian unemployment
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TABLE B-35.—Unemployment by reaso
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TABLE B-37.— Wage and salary work
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TABLE B-39.—Average weekly earnin
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TABLE B-41.—Changes in productivi
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TABLE B-43-—Industrial production
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TABLE B-45.—Capacity utilization
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TABLE B-46.—New construction acti
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TABLE B-48.—Nonfarm business expe
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TABLE B-50.—Manufacturers' shipme
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Year or monthAllitemsPRICESTABLE B-
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TABLE B-53.—Consumer price indexe
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TABLE B-55.—Changes in consumer p
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TABLE B-57.—Producer price indexe
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MONEY STOCK, CREDIT, AND FINANCETAB
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TABLE B-63.—Commercial bank loans
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TABLE B-64.—Total funds raised in
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TABLE B-66.—Aggregate reserves of
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TABLE B-67 .—Bond yields and inte
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TABLE B-69.—Consumer installment
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TABLE B-71-—Mortgage debt outstan
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TABLE B-72.—Federal budget receip
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TABLE B-74.—Relation of Federal G
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TABLE B-76.—Federal Government re
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TABLE B-78.—State and local gover
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TABLE B-80.—Estimated ownership o
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CORPORATE PROFITS AND FINANCETABLE
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Year or quarterTABLE B-84.—Corpor
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TABLE B-86.—Relation of profits a
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TABLE B-88.—Determinants of busin
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TABLE B-9Q.~Current assets and liab
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TABLE B-92.—Common stock prices a
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AGRICULTURETABLE B-94.—Farm incom
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TABLE B-96.—Farm input use, selec
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TABLE B-98.—U.S. exports and impo
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INTERNATIONAL STATISTICSTABLE B-100
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TABLE B-101.—U.S. international t
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TABLE B-103.—U.S. merchandise exp
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TABLE B-105.—International invest
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TABLE B-107.— World trade balance
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TABLE B-109.—Growth rates in real
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TABLE B-lll.—Unemployment rate, a
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Economic Report of the President

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