Econ 545 Project Paper
THE GLOBAL ECONOMY
PROJECT PAPER 2
By
Team F
Submitted in Partial Fulfillment of the Course
Requirements for
Business Economics
ECON545
Professor
The US Economy in 1982-2000
Introduction
Throughout the late 1970s, American people had grown discontent with the government’s fiscal and monetary policies as the economy was stagnant and recovery was not in sight. This ultimately led to the election of former actor and California governor, Ronald Reagan in 1980. President Reagan’s economic policy was based in the theory of supply-side economics, which promotes the reduction of taxes to stimulate spending and investment. Additionally, he made cuts to social programs as he believed that government had become too big and intrusive. Next, the President also increased defense spending out of concern that the country had neglected its military after the Vietnam War. This combination overwhelmed the small reductions in other domestic programs and ultimately led to an increase in federal budget deficit even higher than the levels seen in the Carter administration; recovery stagnated once again.
The effects of a slow economy show in the unemployment rates. We can observe the table shown below, that even after the economy is recovering, the unemployment rates are still higher than before the recession began. This can be due to the accumulation of the unemployed during the previous year of recession.
U.S. Unemployment Rates Month-by-Month for the Period 1978-1984 | Year | Jan | Feb | Mar | Apr | May | June | July | Aug | Sept | Oct | Nov | Dec | 1978 | 6.4 | 6.3 | 6.3 | 6.1 | 6.0 | 5.9 | 6.2 | 5.9 | 6.0 | 5.8 | 5.9 | 6.0 | 1979 | 5.9 | 5.9 | 5.8 | 5.8 | 5.6 | 5.7 | 5.7 | 6.0 | 5.9 | 6.0 | 5.9 | 6.0 | 1980 | 6.3 | 6.3 | 6.3 | 6.9 | 7.5 | 7.6 | 7.8 | 7.7 | 7.5 | 7.5 | 7.5 | 7.2 | 1981 | 7.5 | 7.4 | 7.4 | 7.2 | 7.5 | 7.5 | 7.2 | 7.4 | 7.6 | 7.9 | 8.3 | 8.5 | 1982 | 8.6 | 8.9 | 9.0 | 9.3 | 9.4 | 9.6 | 9.8 | 9.8 | 10.1 | 10.4 | 10.8 | 10.8 |
PROJECT PAPER 2
By
Team F
Submitted in Partial Fulfillment of the Course
Requirements for
Business Economics
ECON545
Professor
The US Economy in 1982-2000
Introduction
Throughout the late 1970s, American people had grown discontent with the government’s fiscal and monetary policies as the economy was stagnant and recovery was not in sight. This ultimately led to the election of former actor and California governor, Ronald Reagan in 1980. President Reagan’s economic policy was based in the theory of supply-side economics, which promotes the reduction of taxes to stimulate spending and investment. Additionally, he made cuts to social programs as he believed that government had become too big and intrusive. Next, the President also increased defense spending out of concern that the country had neglected its military after the Vietnam War. This combination overwhelmed the small reductions in other domestic programs and ultimately led to an increase in federal budget deficit even higher than the levels seen in the Carter administration; recovery stagnated once again.
The effects of a slow economy show in the unemployment rates. We can observe the table shown below, that even after the economy is recovering, the unemployment rates are still higher than before the recession began. This can be due to the accumulation of the unemployed during the previous year of recession.
U.S. Unemployment Rates Month-by-Month for the Period 1978-1984 | Year | Jan | Feb | Mar | Apr | May | June | July | Aug | Sept | Oct | Nov | Dec | 1978 | 6.4 | 6.3 | 6.3 | 6.1 | 6.0 | 5.9 | 6.2 | 5.9 | 6.0 | 5.8 | 5.9 | 6.0 | 1979 | 5.9 | 5.9 | 5.8 | 5.8 | 5.6 | 5.7 | 5.7 | 6.0 | 5.9 | 6.0 | 5.9 | 6.0 | 1980 | 6.3 | 6.3 | 6.3 | 6.9 | 7.5 | 7.6 | 7.8 | 7.7 | 7.5 | 7.5 | 7.5 | 7.2 | 1981 | 7.5 | 7.4 | 7.4 | 7.2 | 7.5 | 7.5 | 7.2 | 7.4 | 7.6 | 7.9 | 8.3 | 8.5 | 1982 | 8.6 | 8.9 | 9.0 | 9.3 | 9.4 | 9.6 | 9.8 | 9.8 | 10.1 | 10.4 | 10.8 | 10.8 |