Economic Report President

More documents

Recommendations

Info

Box 7-3.—How Does the Dollar Rank Today Against OtherInternational Currencies?Most measures show a gradual decline in international use of thedollar in recent decades. Reserve currency use, perhaps the bestmeasure, is shown in Chart 7-3. The dollar’s share of central bankreserve holdings declined from 76 percent in 1973 to 49 percent in1990. This reflects a gradual shift of central bank portfolio shares intomarks and yen. However, the dollar’s share in reserve holdings hasbeen relatively flat in the 1990s, amounting to 57 percent in 1997.Other major measures of international currency status, as ofthe eve of the birth of the euro, are shown in Table 7-1. They tendto present the same picture: the dollar still leads, despite a gradualdecline in its use versus the mark and the yen over the last 30years. The dollar is still more important than its three or fourclosest rivals combined.The first column in Table 7-1 reports the popularity of major currenciesamong smaller countries choosing a peg for their currencies.The dollar is the choice of 39 percent of these countries. Three currencies(those of Bosnia, Bulgaria, and Estonia) were pegged to themark last year, however. Elsewhere, the French franc was, after thedollar, still the most common choice as a peg, accounting for 29 percentof countries using pegs; these countries are principally in Africa,owing to a special set of arrangements with the French treasury. Theeuro is inheriting this role of the mark and the franc. It is still thecase that no currencies anywhere are pegged to the yen. The dollarwas the currency either bought or sold in fully 87 percent of trades inglobal foreign exchange markets in April 1998 . This figure (like theshare of reserves held in dollars) should automatically go up in1999, as EMU eliminates intra-European transactions amongmember currencies.The various measures of the use of currencies to denominate privateinternational financial transactions—loans, bonds, anddeposits—also still showed the dollar as the dominant currency,with a 54 percent share.Figures on the use of international currencies as substitutes inlocal cash transactions are not generally available. According to estimates,however, the leader has been the dollar, for which internationallycirculating cash has been estimated by the Federal Reserveat 60 percent of currency outstanding. International circulation ofthe mark has been estimated by the Bundesbank (Germany’s centralbank) at 35 to 40 percent of the German currency outstanding, butbecause the outstanding stock of marks is much smaller than thatof dollars, the mark’s share of total currency in internationalcirculation is smaller than this figure would suggest.300
Chart 7-3 International Use of Major CurrenciesAlthough official use of the dollar is below its peak in the mid-1970s, it remainsmuch more widely used than the other major currencies.Percent of official holdings of foreign exchange (end of year)8060U.S. dollar4020PoundYenMark01965 1969 1973 1977 1981 1985 1989 1993 1997Source: International Monetary Fund.TABLE 7-1.— The Importance of Major Currencies on theEve of the Introduction of the Euro[Shares in international use]CurrencyPeggingof minorcurrenciesForeignexchangereservesheld bycentralbanksForeignexchangetradinginworldmarkets 1InternationalcapitalmarketsInternationaltradeCashheldoutsidehomecountryU.S. Dollar .......................................................................... 0.39 0.57 0.87 0.54 0.48 0.78Deutsche mark .................................................................. .06 .13 .30 .11 .16 .22Japanese yen ..................................................................... .00 .05 .21 .08 .05 (2)Pound sterling ................................................................... .00 .03 .11 .08 .00French franc ...................................................................... .29 .01 .05 .06 } .15 .00Other EMS currencies ........................................................ .04 (2) (2) .00ECU .................................................................................... .00 .05 } .17 .01 .00 .00Other/unspecified .............................................................. .22 .15 .29 .12 .16 (2)1Shares add to 2.00 because in each currency transaction there are two currencies traded.2Not available.Sources: Various international agencies (including International Monetary Fund, Bank for International Settlements, andOrganization for <strong>Economic</strong> Cooperation and Development) and other sources.for granted. But the benefits from having one’s country’s currencyused as a unit of account should not be overemphasized. Invoicing U.S.imports in dollars does not necessarily shift the currency risk from thebuyer to the seller, as the dollar price sometimes can change quicklywhen the exchange rate changes.A second possible advantage is increased business for the country’sbanks and other financial institutions. However, there need be no firm301
Page 1 and 2:
EconomicReportof thePresidentTransm
Page 3 and 4:
C O N T E N T SPageECONOMIC REPORT
Page 5 and 6:
ECONOMIC REPORT OF THE PRESIDENTTo
Page 7 and 8:
Once we have saved Social Security,
Page 9 and 10:
THE ANNUAL REPORTOF THECOUNCIL OF E
Page 11 and 12:
C O N T E N T SPageCHAPTER 1. MEETI
Page 13 and 14:
PageCHAPTER 5. REGULATION AND INNOV
Page 15 and 16:
Page2-3. Accounting for Growth in R
Page 17 and 18:
Page6-5. Terms of Trade ...........
Page 19 and 20:
CHAPTER 1Meeting Challenges and Bui
Page 21 and 22:
Box 1-1.—The Dating of Business C
Page 23 and 24:
Chart 1-1 Core Inflation and Unempl
Page 25 and 26:
expansion prematurely. In fact, the
Page 27 and 28:
the duration of the typical unemplo
Page 29 and 30:
throughout that decade of peace and
Page 31 and 32:
all individuals aged 65 and older r
Page 33 and 34:
extent that it would reduce Social
Page 35 and 36:
the vulnerability of the internatio
Page 37 and 38:
access. Even so, international agre
Page 39 and 40:
eliminated entirely, because the go
Page 41 and 42:
Nevertheless, adjustment assistance
Page 43 and 44:
CHAPTER 2Macroeconomic Policyand Pe
Page 45 and 46:
Then the chapter explores two other
Page 47 and 48:
target Federal funds rate brought t
Page 49 and 50:
high of 66.8 percent in the third q
Page 51 and 52:
the third-quarter deceleration and
Page 53 and 54:
(that is, excluding food and energy
Page 55 and 56:
probably would have increased by ab
Page 57 and 58:
Equities clearly involve risk as we
Page 59 and 60:
highest level in at least 40 years
Page 61 and 62:
attributed to the lesser liquidity
Page 63 and 64:
971231 980106 980112 980116 980122
Page 65 and 66:
about the potential impact of large
Page 67 and 68:
With respect to leverage, the degre
Page 69 and 70:
noted earlier, investment-grade bor
Page 71 and 72:
Chart 2-8 Corporate Profits and Net
Page 73 and 74:
is attributable to the strong econo
Page 75 and 76:
productivity; the latter is in turn
Page 77 and 78:
the year 2000, mistaking it instead
Page 79:
Box 2-2.—continuedare not expecte
Page 82 and 83:
construct an accurate forecasting m
Page 84 and 85:
is estimated as the location where
Page 86 and 87:
the recent surge in productivity re
Page 88 and 89:
Box 2-3.—continuedhowever. Import
Page 90 and 91:
Chart 2-12 Three Measures of Core I
Page 92 and 93:
a level of capacity utilization tha
Page 94 and 95:
Box 2-4.—continuedChanges to be i
Page 96 and 97:
Nonfarm manufacturing and trade inv
Page 98 and 99:
has been for the past 3 years. But
Page 100 and 101:
who have traditionally not fared as
Page 102 and 103:
Box 3-1.—continuedas well as full
Page 104 and 105:
and been replaced by younger, more
Page 106 and 107:
Particularly interesting, however,
Page 108 and 109:
Chart 3-5 Median Hourly Wages of Me
Page 110 and 111:
In fact, in 1990 immigrants and nat
Page 112 and 113:
Box 3-2.—continuedsome firms may
Page 114 and 115:
Box 3-3.—continuedmaximum of $3,7
Page 116 and 117:
willing to hire welfare recipients
Page 118 and 119:
participation. The renewed increase
Page 120 and 121:
TANF grants in reserve at the Treas
Page 122 and 123:
JOB DISPLACEMENTWorkers are conside
Page 124 and 125:
evidence finds that the percentage
Page 126 and 127:
their non-labor market activities.
Page 128 and 129:
The Administration is especially co
Page 130 and 131:
CHAPTER 4Work, Retirement, and theE
Page 132 and 133:
Chart 4-1 Life Expectancy at Age 65
Page 134 and 135:
Population aging is not just an Ame
Page 136 and 137:
Box 4-1.—continuedfor couples and
Page 138 and 139:
earlier retirement, by increasing l
Page 140 and 141:
uyouts may also have contributed to
Page 142 and 143:
Box 4-2.—Social Security RulesThe
Page 144 and 145:
available with the same hourly pay,
Page 146 and 147:
Box 4-4.—Types of Pension PlansUn
Page 148 and 149:
worker—declined. More of these ol
Page 150 and 151:
survey) was about 13 percent higher
Page 152 and 153:
well-being is that families have di
Page 154 and 155:
Chart 4-9 Living Arrangements of El
Page 156 and 157:
mentioned earlier in this chapter a
Page 158 and 159:
Box 4-7.—The Federal Role in Empl
Page 160 and 161:
inequality among retirees who have
Page 162 and 163:
whether minorities and women are li
Page 164 and 165:
TABLE 4-4.—Poverty Rates Among th
Page 166 and 167:
TABLE 4-6.—Family Holdings of Fin
Page 168 and 169:
variety of reasons, including the f
Page 170 and 171:
the number of patents granted in th
Page 172 and 173:
The United States has a decades-lon
Page 174 and 175:
matter, depending on various condit
Page 176 and 177:
company Roche Holdings, Ltd. Some o
Page 178 and 179:
The antitrust authorities’ linkin
Page 180 and 181:
espective Writings and Discoveries.
Page 182 and 183:
Box 5-3.—Cooperative Innovation a
Page 184 and 185:
machine owned by another. The disti
Page 186 and 187:
companies begin to offer DSL servic
Page 188 and 189:
and compete for customers on the ba
Page 190 and 191:
In another part of the Internet mar
Page 192 and 193:
technology at hand. But incentive-b
Page 194 and 195:
the flexibility to choose lower cos
Page 196 and 197:
In contrast to both performance and
Page 198 and 199:
The SO 2 experience reveals several
Page 200 and 201:
Box 5-7.—The Partnership for a Ne
Page 202 and 203:
Consumers’ investment in energy e
Page 204 and 205:
clean-energy projects in developing
Page 206 and 207:
Chart 5-2 Energy Efficiency and Pri
Page 208 and 209:
equipment, and more than 90 percent
Page 210 and 211:
Box 5-9.—Is There an Environmenta
Page 212 and 213:
larger coal plants. In 1994 these t
Page 214 and 215:
around the country, and seven other
Page 216 and 217:
other social goals. The fund would
Page 218 and 219:
greater opportunity, faster growth,
Page 220 and 221:
Chart 6-1 Net Capital Flows to Deve
Page 222 and 223:
Box 6-1.—The Explosive Growth of
Page 224 and 225:
Recent Financial LiberalizationIn m
Page 226 and 227:
and investment (although openness t
Page 228 and 229:
Box 6-2.—Market-Based (Arm’s-Le
Page 230 and 231:
conditionality in the face of unsou
Page 232 and 233:
Box 6-4.—Sovereign Spreads in Eme
Page 234 and 235:
social safety nets in the crisis co
Page 236 and 237:
Box 6-5.—Moral Hazard in Financia
Page 238 and 239:
Empirical studies confirm that, by
Page 240 and 241:
withdrew $26 billion in 1997. Altho
Page 242 and 243:
America, and these linkages partly
Page 244 and 245:
8.5 percent of GDP in 1998. Indones
Page 246 and 247:
sary revenues to meet these extra i
Page 248 and 249: which is considered a monetary asse
Page 250 and 251: ates at home, they sought higher re
Page 252 and 253: Chart 6-3 Real Value of the Dollar
Page 254 and 255: The increase in the trade deficit a
Page 256 and 257: Chart 6-6 Current Account BalanceTh
Page 258 and 259: Chart 6-7 Economic Growth and Trade
Page 260 and 261: investment. The U.S. gross investme
Page 262 and 263: Chart 6-10 Current Account Deficit
Page 264 and 265: with other countries to strengthen
Page 266 and 267: REFORM OF THE INTERNATIONAL FINANCI
Page 268 and 269: about their macroeconomic and finan
Page 270 and 271: decisions respond to market signals
Page 272 and 273: Other measures recommended by the w
Page 274 and 275: ADOPTION OF MEASURES TO REFORM THEI
Page 276 and 277: Another way to improve global surve
Page 278 and 279: Issues Posed by Hedge Funds and Oth
Page 280 and 281: the best investment opportunities,
Page 282 and 283: egulation of inflows to banks alone
Page 284 and 285: complement the role of official fin
Page 286 and 287: emerging markets will take time to
Page 288 and 289: Box 7-1.—continuedpartner; a stro
Page 290 and 291: Chart 7-1 European Short-Term Inter
Page 292 and 293: members agreed in a separate Growth
Page 294 and 295: Box 7-2.—continuedthrough an auto
Page 296 and 297: advantages of EMU to U.S. residents
Page 300 and 301: connection between the currency in
Page 302 and 303: as an economic superpower early in
Page 304 and 305: Appendix AREPORT TO THE PRESIDENT O
Page 306 and 307: Council Members and Their Dates of
Page 308 and 309: The Chair and Members work as a tea
Page 310 and 311: countries. The Council heads the U.
Page 312 and 313: Chief of Staff and General CounselM
Page 314 and 315: affiliations. They are Christopher
Page 316 and 317: C O N T E N T SNATIONAL INCOME OR E
Page 318 and 319: B-71. Aggregate reserves of deposit
Page 320 and 321: General NotesDetail in these tables
Page 322 and 323: TABLE B-1.—Gross domestic product
Page 324 and 325: TABLE B-2.—Real gross domestic pr
Page 326 and 327: TABLE B-4.—Percent changes in rea
Page 328 and 329: TABLE B-5.—Contributions to perce
Page 330 and 331: TABLE B-6.—Chain-type quantity in
Page 332 and 333: TABLE B-7.—Chain-type price index
Page 334 and 335: TABLE B-9.—Real gross domestic pr
Page 336 and 337: Year orquarterGrossdomesticproductT
Page 338 and 339: YearBased on1972 SIC:TABLE B-13.—
Page 340 and 341: TABLE B-15.—Output, costs, and pr
Page 342 and 343: TABLE B-17.—Real personal consump
Page 344 and 345: TABLE B-19.—Real private gross fi
Page 346 and 347: TABLE B-21.—Real government consu
Page 348 and 349:
TABLE B-23.—Real inventories and
Page 350 and 351:
TABLE B-25.—Real exports and impo
Page 352 and 353:
TABLE B-27.—Relation of national
Page 354 and 355:
TABLE B-28.—National income by ty
Page 356 and 357:
TABLE B-29.—Sources of personal i
Page 358 and 359:
TABLE B-31.—Total and per capita
Page 360 and 361:
TABLE B-32.—Gross saving and inve
Page 362 and 363:
POPULATION, EMPLOYMENT, WAGES, AND
Page 364 and 365:
TABLE B-35.—Civilian population a
Page 366 and 367:
TABLE B-37.—Civilian employment b
Page 368 and 369:
TABLE B-39.—Civilian labor force
Page 370 and 371:
TABLE B-41.—Civilian employment/p
Page 372 and 373:
TABLE B-43.—Civilian unemployment
Page 374 and 375:
TABLE B-45.—Unemployment insuranc
Page 376 and 377:
TABLE B-46.—Employees on nonagric
Page 378 and 379:
TABLE B-48.—Employment cost index
Page 380 and 381:
Year orquarterTABLE B-50.—Changes
Page 382 and 383:
Year or monthTABLE B-52.—Industri
Page 384 and 385:
TABLE B-54.—Capacity utilization
Page 386 and 387:
Year or monthTABLE B-56.—New hous
Page 388 and 389:
TABLE B-58.—Manufacturers’ ship
Page 390 and 391:
PRICESTABLE B-60.—Consumer price
Page 392 and 393:
TABLE B-61.—Consumer price indexe
Page 394 and 395:
TABLE B-63.—Changes in special co
Page 396 and 397:
TABLE B-65.—Producer price indexe
Page 398 and 399:
Page 400 and 401:
Page 402 and 403:
YearandmonthMONEY STOCK, CREDIT, AN
Page 404 and 405:
TABLE B-70.—Components of money s
Page 406 and 407:
TABLE B-72.—Bank credit at all co
Page 408 and 409:
TABLE B-73.—Bond yields and inter
Page 410 and 411:
TABLE B-74.—Credit market borrowi
Page 412 and 413:
TABLE B-76.—Mortgage debt outstan
Page 414 and 415:
GOVERNMENT FINANCETABLE B-78.—Fed
Page 416 and 417:
TABLE B-80.—Federal receipts and
Page 418 and 419:
TABLE B-82.—Federal Government re
Page 420 and 421:
TABLE B-84.—Federal and State and
Page 422 and 423:
TABLE B-86.—State and local gover
Page 424 and 425:
TABLE B-88.—Maturity distribution
Page 426 and 427:
CORPORATE PROFITS AND FINANCETABLE
Page 428 and 429:
TABLE B-92.—Corporate profits of
Page 430 and 431:
TABLE B-94.—Relation of profits a
Page 432 and 433:
Year or monthTABLE B-96.—Business
Page 434 and 435:
End of yearTotalassetsTABLE B-98.
Page 436 and 437:
YearFarm population,April 1Number(t
Page 438 and 439:
YearTABLE B-102.—U.S. exports and
Page 440 and 441:
TABLE B-103.—U.S. international t
Page 442 and 443:
TABLE B-105.—U.S. international t
Page 444 and 445:
TABLE B-107.—International invest
Page 446 and 447:
TABLE B-109.—Civilian unemploymen
Page 448 and 449:
TABLE B-111.—International reserv
show all

Economic Report President

You also want an ePaper? Increase the reach of your titles

Delete template?

Save as template?