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ECONOMIC REPORT OF THE PRESIDENT

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ECONOMIC REPORT OF THE

ECONOMIC REPORT OF THE PRESIDENT Together With THE ANNUAL REPORT of the COUNCIL OF ECONOMIC ADVISERS JANUARY 2017

  • Page 2: economic report of the president ja
  • Page 6: economic report of the president
  • Page 9 and 10: ate fell by more than any year sinc
  • Page 11 and 12: in education from Pre-K all the way
  • Page 14: letter of transmittal Council of Ec
  • Page 17 and 18: GDP Growth over the Next Three Year
  • Page 19 and 20: PROGRESS TO-DATE IN TRANSITIONING T
  • Page 21 and 22: 2.40. Brent Crude Oil Prices, 2015-
  • Page 23 and 24: 4.46. Premiums and Cost Sharing for
  • Page 25 and 26: 2.2. Supply-Side Components of Actu
  • Page 27 and 28: The forceful response of the Federa
  • Page 29 and 30: Figure 1-2 Private-Sector Payroll E
  • Page 31 and 32: growth in the fourth quarter of 200
  • Page 33 and 34: and diligent efforts to pay down de
  • Page 35 and 36: Figure 1-7 Civilian Employment in t
  • Page 37 and 38: Box 1-1: Revisions to Crisis-Era Da
  • Page 39 and 40: measures would end and would not ha
  • Page 41 and 42: Department established a temporary
  • Page 43 and 44: Box 1-2: The Manufacturing Sector A
  • Page 45 and 46: ​ struggled to recover the jobs l
  • Page 47 and 48: Figure 1-10a Quarterly Effect of th
  • Page 49 and 50: Figure 1-11 Change in Share of Afte
  • Page 51 and 52: Figure 1-12 Growth in Real Costs fo
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    Box 1-3: The Administration’s Rec

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    Figure 1-iii Utility Patent Applica

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    Figure 1-14 Tier 1 Common Equity Ra

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    Figure 1-15 Decomposition of Total

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    2012. From 2009 to 2015, U.S. expor

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    participation, and building a resil

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    Figure 1-17 Share of Income Earned

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    Figure 1-18a Prime-Age Male Labor F

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    Figure 1-19 U.S. Net Emissions, 199

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    purchases have been roughly neutral

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    growth reflects slow labor producti

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    udget pressures (Box 2-1).2 In 2016

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    Box 2-1: Challenges in the State an

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    Figure 2-iii State and Local Govern

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    Labor Market The labor market conti

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    Box 2-2: Oil Prices and Employment

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    Figure 2-6 Actual and Consensus For

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    Box 2-3: Male Prime-Age Labor Force

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    age men; reforming unemployment ins

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    Figure 2-10 Real Growth in GDP, Pri

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    Box 2-4: Optimal Weighting for Comb

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    Table 2-ii Optimal Weighting for Pa

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    Figure 2-vii Labor Force Participat

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    growth in part driven by the rapid

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    Box 2-6: Household Deleveraging and

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    which fell sharply in the Great Rec

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    Percent of Housing Units 14 13 Figu

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    Figure 2-18 Delinquent and Underwat

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    zoning, other land use regulations,

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    a year to labor productivity growth

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    Figure 2-25 Contribution of Invento

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    Figure 2-xiv Decomposition of the I

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    a half, consistent with the observa

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    Figure 2-27 Contribution of Net Exp

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    Figure 2-29 Contributions to Growth

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    Box 2-8: Productivity Among the Adv

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    Figure 2-xviii Change in Growth in

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    productive innovation. There is no

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    Figure 2-35 Growth in Real Househol

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    Figure 2-37 S&P 500 and VIX, 2015-2

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    Figure 2-39 CDS Spreads for North A

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    as a market forecast of the 10-year

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    Figure 2-42 Real Broad Trade-Weight

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    Figure 2-43 Employment and Industri

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    Euro area Recovery from the financi

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    Figure 2-44 Fiscal Breakeven Oil Pr

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    adjusting to changing dynamics in t

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    2015 (Actual) Nominal GDP Table 2-1

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    Box 2-9: Policy Proposals to Raise

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    total factor productivity and there

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    tends to grow faster in the nonfarm

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    C H A P T E R 3 PROGRESS REDUCING I

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    have been under 2008 policies.2 , 3

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    Table 3-1 Timeline of Select Recove

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    Table 3-I Measures of Inequality, 1

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    Figure 3-1 Percent 18 15 Unemployme

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    Gini Index 0.66 0.64 Figure 3-4 Ear

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    Percent Change in After-Tax Income

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    Figure 3-ii Top 1 Percent Income Sh

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    Percent of Population Without Healt

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    and 9 percentage points for African

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    Enacting a Fairer Tax Code In 2008,

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    Percent 60 Figure 3-iv Percent of F

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    deficit reduction. At the beginning

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    individual Alternative Minimum Tax;

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    for a minimum wage that is too low,

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    incomes in the bottom quintile by 1

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    20 15 10 5 Figure 3-14 Percent Redu

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    Figure 3-15 Change in Bottom 99% Sh

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    to policy changes enacted during ea

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    tax policy and the coverage provisi

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    udgetary flexibility for additional

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    Appendix: Distribution of Changes i

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    health insurance coverage by signin

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    The six years since the ACA became

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    Medicare and Medicaid were created

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    Share of Income Required to Purchas

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    But these efforts left significant

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    percent were denied coverage, charg

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    Box 4-1: Public Health Benefits of

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    Figure 4-6 Health Insurance Coverag

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    (Marketplaces), web-based markets t

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    Decline in Uninsured Rate, 2013-201

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    silver (or “benchmark”) plan in

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    health status of individual market

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    Figure 4-iv Change in Benchmark Pre

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    illustrated in Figure 4-10 (KFF/HRE

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    chapter reviews this evidence base,

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    Share of Population Not Receiving N

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    for confidence that expanded insura

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    as the proportional reduction in th

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    that the introduction of Medicare l

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    statistical area (MSA), and rural a

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    0.8 0.6 0.4 0.2 0.0 -0.2 -0.4 -0.6

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    currently employed. 15 Contrary to

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    Figure 4-20 Change in Average Weekl

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    Figure 4-21 Employment Outcomes for

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    Figure 4-22 Health Care Spending as

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    suggesting that the additional spen

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    Government, which pays for the majo

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    large health benefits. When decidin

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    and any other services associated w

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    Figure 4-25 Medicare Beneficiaries

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    is far below the overall return to

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    provide excessively costly and inef

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    Percent 100 Figure 4-27 Percent of

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    Aggregate spending refers to the to

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    3 Figure 4-29 Trends in Real Health

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    Panel A: Private Insurance Average

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    Figure 4-33 Nominal Per Enrollee He

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    Indeed, Holahan and McMorrow (2015)

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    illustrated in Figure 4-3. As a res

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    Figure 4-36 Unemployment Rate, 2006

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    Average Age 40 Figure 4-37 Average

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    Percent 25 Figure 4-39 Out-of-Pocke

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    suggests that changes in the health

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    egan restraining health care spendi

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    payments made to providers. These p

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    Declines in the Rate of Hospital-Ac

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    Figure 4-43 Medicare 30-Day, All-Co

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    Figure 4-44 Projected National Heal

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    Figure 4-45 Average Nominal Premium

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    2016 Part D premium was $34.10 per

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    Figure 4-47 Deficit Reduction Due t

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    The reforms included in the ACA and

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    Earnings Ratio 1.8 1.7 1.6 1.5 1.4

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    Individual Returns to Higher Educat

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    Rate 100 90 80 70 60 50 40 30 20 10

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    alone would supply an inefficiently

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    The economics literature provides s

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    students who overestimate costs are

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    permanent in 2015; the refundable p

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    Figure 5-6 Annual Percent Change in

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    Figure 5-8 Growth in the Cost of At

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    Figure 5-9 Promise Programs Across

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    Box 5-3: Expansions of Early Educat

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    The evidence suggests that, on aver

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    Rate 16 Figure 5-12 Cohort Default

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    Figure 5-13 Repayment Distribution

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    Figure 5-14 Borrowers in Income Dri

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    efore entering income-driven repaym

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    crucial role in encouraging student

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    College rankings like Forbes, Money

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    Box 5-4: Improving Information to D

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    Figure 5-21 FAFSA Tax Filing Status

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    Staiger 2014), and feedback from ev

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    Box 5-6: The Rise of the For-Profit

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    Figure 5-22 Relationship Between Un

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    tactics (consistent with a 2010 Gov

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    Better information and regulation o

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    hold more capital and have better a

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    and other non-cash payment methods

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    Box 6-1: Financialization of the U.

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    accounted for half of the industry

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    Figure 6-iii Families with Direct o

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    are due in part to information asym

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    Figure 6-1 Household Net Worth in t

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    Figure 6-3 Subprime Mortgage Origin

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    Figure 6-6 Growth of Shadow Banking

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    these financial institutions and th

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    Box 6-2: A Cross-Country Comparison

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    to the larger financial system as s

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    y scoring banks based on their perc

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    Figure 6-8 Tier 1 Common Equity Rat

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    Figure 6-9 Liquidity Ratio for Larg

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    Figure 6-11 Losses for Large U.S. B

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    Figure 6-viii Average Loan Growth o

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    deposits—from 1.15 percent to 1.3

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    U.S. financial stability, subjectin

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    systemic footprint. In April 2015,

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    market fund boards new tools - liqu

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    Figure 6-18 shows that the SRISK me

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    Box 6-4: Have We Ended “Too-Big-T

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    Scholars using each of these method

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    Overall, the funding advantage of g

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    Basis Points (bps) 500 Figure 6-19

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    Figure 6-20 Global OTC Derivatives

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    Figure 6-21 Interest Rate Derivativ

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    to a shareholder advisory vote on e

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    Additional Investor Protections The

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    Figure 6-xii U.S. Retirement Assets

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    ule does not ban such “conflicted

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    Figure 6-22 International Financial

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    tors,” tasked the SEC with ensuri

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    Figure 6-25 Fixed Income Implied Vo

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    peak above 200 in the fall of 2008

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    C H A P T E R 7 ADDRESSING CLIMATE

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    generation from natural gas and ren

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    Figure 7-1 Billion-Dollar Event Typ

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    will strain Federal fire suppressio

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    climate sensitivity.6 With the poss

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    Figure 7-2 Greenhouse Gas Emissions

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    modernization, advanced vehicles an

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    2,200 Figure 7-3 Clean Power Plan P

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    Box 7-1: Quantifying the Benefits o

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    uilding use, and 30 percent of indu

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    Box 7-2: Investing in Clean Energy

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    advanced vehicle technologies (CEA

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    adaptation plans, establishing a st

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    of climate change—a critical comp

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    Index, 2000=1 1.3 1.2 Figure 7-5 GD

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    Figure 7-9 Energy Intensity Project

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    Petroleum consumption was 2 percent

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    Index, 2003=1 1.1 Figure 7-14a Ener

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    Figure 7-15a Carbon Intensity Proje

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    Figure 7-18 Monthly Share of Non-Hy

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    Figure 7-20 U.S. Non-Hydro Renewabl

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    in the United States where new wind

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    Figure 7-24 Growth Rates of GDP, En

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    Figure 7-25 Decomposition of Total

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    Lower carbon intensity also played

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    Figure 7-27 U.S. Net Emissions base

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    Obama and President Xi made a surpr

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    years, accelerate cost reductions f

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    to increase transparency from Burea

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    As penetration of variable energy r

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    accomplishments in the clean energy

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    REFERENCES Chapter 1 Blinder, Alan

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    IMF Country Report 16/220. Washingt

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    of Governors of the Federal Reserve

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    Chapter 3 Aguiar, Mark, and Mark Bi

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    Dahl, Gordon B., and Lance Lochner.

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    Care Act Implementation; Problems R

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    Baicker, Katherine, et al. 2013.

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    Claxton, Gary, Larry Levitt, and Mi

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    Cutler, David M., Mark McClellan, a

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    NBER Working Paper 21352. Cambridge

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    Health Care Payment Learning & Acti

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    Lee, David, and Frank Levy. 2012.

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    accountable-care-organizations-in-2

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    Shekelle, Paul G. 2015. “Electron

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    White, Chapin, and Vivian Yaling Wu

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    Baum, Sandy, Jennifer Ma, and Kathl

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    ______. 2014b. “Measuring the Imp

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    Darolia, Rajeev, et al. 2015. “Do

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    Fain, Paul. 2014. “Benefits of Fr

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    Horn, Laura, Xianlei Chen, and Chri

  • Page 530 and 531:

    Lavecchia, Adam, Heidi Liu, and Phi

  • Page 532 and 533:

    Nord, Mark, and Mark Prell. 2011.

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    Sun, Stephen, and Constantine Yanne

  • Page 536 and 537:

    Berk, Jonathan B., and Richard C. G

  • Page 538 and 539:

    Statistics and Monetary Affairs. (h

  • Page 540 and 541:

    Bodnar, Paul, and Dave Turk. 2015.

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    ______. 2016f. “Workplace Chargin

  • Page 544 and 545:

    Farmer, E.D., V.G. Newman, and Pete

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    Lenton, Timothy M., et al. 2008.

  • Page 548:

    Walsh, Bryan. 2010. “Why the Clim

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    letter of transmittal Council of Ec

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    Council Members and Their Dates of

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    University of California, Berkeley

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    that some criminal justice policies

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    The Staff of the Council of Economi

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    Interns Student interns provide inv

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    C O N T E N T S GDP, INCOME, PRICES

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    General Notes Detail in these table

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    Table B-1. Percent changes in real

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    Table B-2. Gross domestic product,

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    Table B-4. Growth rates in real gro

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    Year or quarter Total Table B-6. Co

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    Table B-8. New private housing unit

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    Table B-10. Changes in consumer pri

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    Table B-11. Civilian labor force, 1

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    Year or month Table B-13. Unemploym

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    Table B-14. Employees on nonagricul

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    Year or quarter Table B-16. Product

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    Table B-18. Federal receipts, outla

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    Table B-20. Federal receipts, outla

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    Table B-22. State and local governm

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    End of month Table B-24. Estimated

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    Table B-25. Bond yields and interes

ECONOMIC REPORT OF THE PRESIDENT
ECONOMIC REPORT OF THE PRESIDENT