ECONOMIC REPORT OF THE PRESIDENT

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letter of transmittal Council of Economic Advisers Washington, D.C., December 15, 2016 Mr. President: The Council of Economic Advisers herewith submits its 2017 Annual Report in accordance of the Employment Act of 1946 as amended by the Full Employment and Balanced Growth Act of 1978. Sincerely yours, Jason Furman Chairman Sandra E. Black Member Jay C. Shambaugh Member 9
Page 1 and 2: ECONOMIC REPORT OF THE PRESIDENT To
Page 4: C O N T E N T S ECONOMIC REPORT OF
Page 8 and 9: economic report of the president To
Page 10 and 11: eforms in history. Banks have sharp
Page 12: the annual report of the council of
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
Page 53 and 54: Box 1-3: The Administration’s Rec
Page 55 and 56: Figure 1-iii Utility Patent Applica
Page 57 and 58: Figure 1-14 Tier 1 Common Equity Ra
Page 59 and 60: Figure 1-15 Decomposition of Total
Page 61 and 62: 2012. From 2009 to 2015, U.S. expor
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participation, and building a resil
Page 65 and 66:
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
Page 198:
Appendix: Distribution of Changes i
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health insurance coverage by signin
Page 203 and 204:
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
Page 249 and 250:
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
Page 269 and 270:
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
Page 289 and 290:
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
Page 307 and 308:
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
Page 313 and 314:
The economics literature provides s
Page 315 and 316:
students who overestimate costs are
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permanent in 2015; the refundable p
Page 319 and 320:
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
Page 325 and 326:
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
Page 339 and 340:
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
Page 353 and 354:
Better information and regulation o
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hold more capital and have better a
Page 357 and 358:
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
Page 367 and 368:
Figure 6-1 Household Net Worth in t
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Figure 6-3 Subprime Mortgage Origin
Page 371 and 372:
Figure 6-6 Growth of Shadow Banking
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these financial institutions and th
Page 375 and 376:
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
Page 381 and 382:
Figure 6-8 Tier 1 Common Equity Rat
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Figure 6-9 Liquidity Ratio for Larg
Page 385 and 386:
Figure 6-11 Losses for Large U.S. B
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Figure 6-viii Average Loan Growth o
Page 389 and 390:
deposits—from 1.15 percent to 1.3
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U.S. financial stability, subjectin
Page 393 and 394:
systemic footprint. In April 2015,
Page 395 and 396:
market fund boards new tools - liqu
Page 397 and 398:
Figure 6-18 shows that the SRISK me
Page 399 and 400:
Box 6-4: Have We Ended “Too-Big-T
Page 401 and 402:
Scholars using each of these method
Page 403 and 404:
Overall, the funding advantage of g
Page 405 and 406:
Basis Points (bps) 500 Figure 6-19
Page 407 and 408:
Figure 6-20 Global OTC Derivatives
Page 409 and 410:
Figure 6-21 Interest Rate Derivativ
Page 411 and 412:
to a shareholder advisory vote on e
Page 413 and 414:
Additional Investor Protections The
Page 415 and 416:
Figure 6-xii U.S. Retirement Assets
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ule does not ban such “conflicted
Page 419 and 420:
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
Page 454 and 455:
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
Page 492 and 493:
IMF Country Report 16/220. Washingt
Page 494 and 495:
of Governors of the Federal Reserve
Page 496 and 497:
Chapter 3 Aguiar, Mark, and Mark Bi
Page 498 and 499:
Dahl, Gordon B., and Lance Lochner.
Page 500 and 501:
Care Act Implementation; Problems R
Page 502 and 503:
Baicker, Katherine, et al. 2013.
Page 504 and 505:
Claxton, Gary, Larry Levitt, and Mi
Page 506 and 507:
Cutler, David M., Mark McClellan, a
Page 508 and 509:
NBER Working Paper 21352. Cambridge
Page 510 and 511:
Health Care Payment Learning & Acti
Page 512 and 513:
Lee, David, and Frank Levy. 2012.
Page 514 and 515:
accountable-care-organizations-in-2
Page 516 and 517:
Shekelle, Paul G. 2015. “Electron
Page 518 and 519:
White, Chapin, and Vivian Yaling Wu
Page 520 and 521:
Baum, Sandy, Jennifer Ma, and Kathl
Page 522 and 523:
______. 2014b. “Measuring the Imp
Page 524 and 525:
Darolia, Rajeev, et al. 2015. “Do
Page 526 and 527:
Fain, Paul. 2014. “Benefits of Fr
Page 528 and 529:
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.
Page 534 and 535:
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.
Page 542 and 543:
______. 2016f. “Workplace Chargin
Page 544 and 545:
Farmer, E.D., V.G. Newman, and Pete
Page 546 and 547:
Lenton, Timothy M., et al. 2008.
Page 548:
Walsh, Bryan. 2010. “Why the Clim
Page 552 and 553:
letter of transmittal Council of Ec
Page 554:
Council Members and Their Dates of
Page 557 and 558:
University of California, Berkeley
Page 559 and 560:
that some criminal justice policies
Page 561 and 562:
The Staff of the Council of Economi
Page 563 and 564:
Interns Student interns provide inv
Page 566 and 567:
C O N T E N T S GDP, INCOME, PRICES
Page 568 and 569:
General Notes Detail in these table
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Table B-1. Percent changes in real
Page 572 and 573:
Table B-2. Gross domestic product,
Page 574 and 575:
Table B-4. Growth rates in real gro
Page 576 and 577:
Year or quarter Total Table B-6. Co
Page 578 and 579:
Table B-8. New private housing unit
Page 580 and 581:
Table B-10. Changes in consumer pri
Page 582 and 583:
Table B-11. Civilian labor force, 1
Page 584 and 585:
Year or month Table B-13. Unemploym
Page 586 and 587:
Table B-14. Employees on nonagricul
Page 588 and 589:
Year or quarter Table B-16. Product
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Table B-18. Federal receipts, outla
Page 592 and 593:
Table B-20. Federal receipts, outla
Page 594 and 595:
Table B-22. State and local governm
Page 596 and 597:
End of month Table B-24. Estimated
Page 598 and 599:
Table B-25. Bond yields and interes
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