ECONOMIC REPORT OF THE PRESIDENT

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Office of the Chairman and Members Jeff Goldstein . . . . . . . . . . . . . . . . . . . . Special Assistant to the Chairman Eric Van Nostrand . . . . . . . . . . . . . . . . Special Assistant to the Chairman and Staff Economist Jamie Keene . . . . . . . . . . . . . . . . . . . . . . Special Assistant to the Members Administrative Office The Administrative Office provides general support for the Council’s activities. This includes financial management, human resource management, travel, operations of facilities, security, information technology, and telecommunications management support. Doris T. Searles . . . . . . . . . . . . . . . . . . . Administrative and Information Management Specialist Interns Student interns provide invaluable help with research projects, dayto-day operations, and fact-checking. Interns during the year were: Gisel Acquatella, Jonathan Adelman, Joshua Allyn, Hunter Baehren, Shantanu Banerjee, Olga Baranoff, Jeffrey Bryant, Cherie Chung, Jasper Clarkberg, Neha Dalal, Yasmine Di Giulio, Jelicia Diggs, Tyler Finn, John Hassett, Apsara Iyer, Madeleine Jones, Samantha Kagan, Sylvia Klosin, Jessica Kong, Maxwell Liebeskind, Jonathan Mallek, Siddharth Mandava, Noah Mathews, Julienne Pasichow, Jana Parsons, Kavi J. Patel, Matthew Schneider, Annemarie Schweinert, Hershil Shah, Andrew Smith, and Brian Wolfe. Departures in 2015 The senior economists who resigned in 2015 (with the institutions to which they returned after leaving the Council in parentheses) were: Jane Dokko (Brookings Institution), Joshua Linn (Resources for the Future), Cynthia Nickerson (USDA), Jennifer Poole (American University), Timothy Simcoe (Boston University), Linda Tesar (University of Michigan), and Abigail Wozniak (University of Notre Dame). The staff economist who departed in 2015 was Timothy Hyde. The research economists who departed in 2015 were Krista Ruffini, Brian Moore, and Susannah Scanlan. Activities of the Council of Economic Advisers During 2015 | 393
Jessica Schumer resigned from her position as Chief of Staff and General Counsel. Jordan Matsudaira resigned from his position as Chief Economist. Matthew Aks resigned from his position as Special Assistant to the Chairman and Research Economist. Wenfan Chen resigned from her position as Economic Statistician. Noah Mann resigned from his position as Policy Analyst. Katherine Rodihan resigned from her position as Special Assistant to the Members. 394 | Appendix A
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ECONOMIC REPORT OF THE PRESIDENT To
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C O N T E N T S ECONOMIC REPORT OF
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economic report of the president To
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when a hardworking American loses h
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the annual report of the council of
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C O N T E N T S CHAPTER 1 INCLUSIVE
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CHAPTER 5 TECHNOLOGY AND INNOVATION
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APPENDIXES A. Report to the Preside
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3.4. Percent Gap Between Actual and
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6.6. Relationship between Output Gr
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C H A P T E R 1 INCLUSIVE GROWTH IN
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To promote inclusive growth, both c
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Percent 20 15 Figure 1-1 Share of I
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Table 1-1 Increase in Income Share
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Figure 1-3 Distribution of Househol
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narrows the pool of human capital t
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over the past several decades has b
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Figure 1-6a The "Great Gatsby Curve
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Figure 1-7 Change in Employment by
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and sellers—consumer and producer
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Percent 15 10 Figure 1-9 Corporate
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Percent 30 Figure 1-11 Share of Wor
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Figure 1-12 Real Construction Costs
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promoting equality of opportunity;
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the division of rents, they can red
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C H A P T E R 2 THE YEAR IN REVIEW
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cold weather.1 The economy rebounde
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Box 2-1: Impact of Oil Price Declin
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Roughly speaking, the decline in th
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Percent of GDP 10 Figure 2-3 Federa
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Figure 2-5 Government Purchases as
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13 percent of GDP. Until 1990, Stat
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of new purchases.2 The increase in
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Figure 2-8 Actual and Consensus For
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Figure 2-10 Rates of Part-Time Work
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less than a tenth of the overall de
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Business fixed investment grew 3.1
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Percent 10 Figure 2-14 Personal Sav
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BEA revises the official statistics
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Index* 100 Figure 2-16 Real Income
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Box 2-5: Are Official Estimates of
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of consumer surplus, which should,
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Figure 2-19 National House Price In
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Box 2-6: Constraints on Housing Sup
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and also was estimated in recent re
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market. Nevertheless, the construct
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Figure 2-23 Net Investment as a Sha
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Percent 80 Figure 2-25 Total Payout
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Figure 2-28 Foreign Real GDP and U.
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Figure 2-30 Sources of Productivity
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Figure 2-32 Nominal Wage Growth Ove
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Figure 2-35 Long-Term Inflation Exp
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Percent 18 Figure 2-36 Nominal 10-Y
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Table 2-1 Selected Interest Rates,
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are close to those projected by the
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International Economics (Petri and
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History Forecast 1953:Q2 to 2015:Q3
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inflation up to 2007 and then expec
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Upside and Downside Forecast Risks.
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earlier forecasts. Figure 3-1 shows
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Real GDP/WAP Growth 2011-2014 Figur
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economists would expect capital dee
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Figure 3-i Actual and Forecasted Wo
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affected the demographic trajectory
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over the first three quarters of 20
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Percentage Points 35 30 Figure 3-7
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the President for a discussion of t
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Box 3-2: Market Volatility in the S
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potential for rapid spillovers betw
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absorb unexpectedly high losses. In
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Box 3-3: Commodity Prices and Infla
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In November 2015, the IMF voted to
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Billions of U.S. Dollars 250 200 15
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U.S. exports are 12.5 percent of th
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Box 3-4: The Importance of the Tran
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The challenging environment for U.S
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child’s environment. Despite the
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and Rossin-Slater 2015).5 These adv
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Figure 4-2 Official Poverty Rate fo
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Figure 4-3 Likelihood of Scoring Ve
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Percent 100 90 80 70 60 50 40 30 20
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Figure 4-7 Achievement Gap is Large
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Hours per Week 24 22 20 Figure 4-9
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Percent 65 Figure 4-11 Preschool En
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Box 4-1: Gender Differences in Earl
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Card and Rothstein 2007; Dickerson
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depend on how parents choose to inv
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y many factors, which makes it diff
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Box 4-3: Federal Early Childhood Pr
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program served over 45 million Amer
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Reauthorization Act of 2015, signed
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document that desegregation of hosp
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to alleviate hunger by supplementin
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adulthood (Hoynes, Schanzenbach, an
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of preschoolers support their child
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program and up to 15 years after co
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a longer period than is true of mos
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to be higher today than in the past
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Figure 4-18 Most Early Childhood Pr
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the preschool programs in Georgia a
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test scores by 6 to 9 percent of a
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Figure 4-20 Increase in Probability
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increased earnings by 31 percent (F
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Figure 5-1 Labor Productivity Growt
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Competition and Dynamism Play a Cri
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adopts pre-existing technology or k
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Figure 5-2 Quantity and Volume of V
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Box 5-2: Occupational Licensing One
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in consumer welfare as they erode t
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Finally, some workers may acquire s
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Box 5-3: Major Research Initiatives
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Figure 5-5 Federal and Nonfederal R
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Figure 5-7 Federal Research and Dev
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Figure 5-10 Percent of Patent Appli
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percent of all cases in 2009 to ove
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(Bloom, Sadun, and Van Reenen 2012)
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Figure 5-12 Estimated Annual Shipme
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was relatively flat through the 200
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In contrast, recent papers by Autor
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services, such as 4G LTE. At the sa
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Box 5-5: The On-Demand Economy “O
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vision of services that may not hav
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Figure 5-17 Household Income and Ho
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about half since ConnectED was laun
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C H A P T E R 6 THE ECONOMIC BENEFI
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enefits to a wide set of consumers
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Figure 6-1 Composition of Public Sp
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Age, Years 29 27 Figure 6-3 Average
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Type CAN FRA DEU ITA JPN GBR USA 20
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Box 6-1: Clean Energy and Transport
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Industry Government Investment Dire
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infrastructure investment is crucia
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Box 6-2: Elasticity of Output to Pu
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and output ignore potential inter-t
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Thus, ideas are exchanged, workers
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kilometers of road) in 1983 resulte
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Prospects for Increased Infrastruct
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Figure 6-6 Relationship between Out
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there is a clear demand for an infr
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user fees or shadow tolls.11 Throug
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to transportation facilities caused
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Tax-Exempt Bonds Transportation inf
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Recent Legislation In December 2015
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enefit freight movements. The Act a
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C H A P T E R 7 THE 70 TH ANNIVERSA
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and composition of the labor force,
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it, “[t]he CEA and its chairman h
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jected reductions in the deficit. I
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example, the Environmental Protecti
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Keyserling and the Council particip
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Countercyclical Policy in Other Adm
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In designing the Recovery Act, one
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incorporating risk and discounting
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and Freddie had lots of friends in
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(USEC). USEC was responsible for pr
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can be reported to him as the perce
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By contrast, Keyserling had activel
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goals of the government in their ar
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Gather, Analyze, and Interpret Info
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the unemployment insurance system w
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an informational basis for appropri
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had experience working in governmen
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emained. I joined forces with Budge
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Of course, relying on short-term ac
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Carson, Ann. 2015. “Prisoners in
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Kleiner, Morris M. and Alan B. Krue
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Congressional Budget Office (CBO).
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Kocin, Paul J. and Louis Uccellini.
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Fajgelbaum, Pablo and Amit Khandelw
Page 347 and 348: World Bank. 2016. “Global Economi
Page 349 and 350: Belfield, Clive R., Milagros Nores,
Page 351 and 352: Campbell, Jennifer A., Rebekah J. W
Page 353 and 354: Council of Economic Advisers. 2014.
Page 355 and 356: Eissa, Nada and Jeffrey B. Liebman.
Page 357 and 358: Hastings, Justine S. and Ebonya Was
Page 359 and 360: Kalil, Ariel, Rebecca Ryan, and Mic
Page 361 and 362: Maxfield, Michelle. 2013. “The Ef
Page 363 and 364: Olds, David, John Eckenrode, Charle
Page 365 and 366: Solon, Gary. 1992. “Intergenerati
Page 367 and 368: Wherry, Laura R., Sarah Miller, Rob
Page 369 and 370: Bloom, Nicholas, Mark Schankerman,
Page 371 and 372: Graham, Stuart JH, Cheryl Grim, Tar
Page 373 and 374: Melitz, Marc J. 2003. “The Impact
Page 375 and 376: ______. 2015. “Patent Assertions:
Page 377 and 378: Congressional Budget Office. 2009.
Page 379 and 380: Peshkin, David G., Todd E. Hoerner,
Page 381 and 382: ______. 2001. Designing U.S. Econom
Page 383 and 384: Krueger, Alan B. 2000. “Honest Br
Page 385 and 386: Weidenbaum, Murray L. 1983. “An E
Page 388 and 389: letter of transmittal Council of Ec
Page 390: Council Members and Their Dates of
Page 393 and 394: The Members of the Council Sandra E
Page 395 and 396: In May, the Council issued a report
Page 397: Nirupama S. Rao . . . . . . . . . .
Page 402 and 403: C O N T E N T S GDP, INCOME, PRICES
Page 404 and 405: General Notes Detail in these table
Page 406 and 407: Table B-1. Percent changes in real
Page 408 and 409: Table B-2. Gross domestic product,
Page 410 and 411: Table B-4. Growth rates in real gro
Page 412 and 413: Year or quarter Total Table B-6. Co
Page 414 and 415: Table B-8. New private housing unit
Page 416 and 417: Table B-10. Changes in consumer pri
Page 418 and 419: Table B-11. Civilian labor force, 1
Page 420 and 421: Year or month Table B-13. Unemploym
Page 422 and 423: Table B-14. Employees on nonagricul
Page 424 and 425: Year or quarter Table B-16. Product
Page 426 and 427: Table B-18. Federal receipts, outla
Page 428 and 429: Table B-20. Federal receipts, outla
Page 430 and 431: Table B-22. State and local governm
Page 432 and 433: End of month Table B-24. Estimated
Page 434 and 435: Table B-25. Bond yields and interes
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