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The Review of the US Macroeconomic Policy - Research Paper Example

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The paper "The Review of the US Macroeconomic Policy " highlights that crucial policy errors by the U.S. Federal Reserve all along the way had led us to a ‘point of no return.’ The worldwide economy, now supported in the main only by the overextended U.S. consumer, finds itself at halt speed. …
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The Review of the US Macroeconomic Policy
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Download file to see previous pages In 2007, the American economy began to slow significantly, mostly because of a real-estate slump and related financial problems, there were predictions that margin squeeze from high energy prices or a dollar shock could be crucial factors tipping US growing economy into a downturn.
With the global political situation ever-changing, foreign policies fluctuation in split second, the economy has suffered too over the recent years. This paper describes the United States of America’s macroeconomic policies in recent years and their impact on the people. We shall consider the past three years and look at how the changing economic policies changed business interests and how they impact the overall economic situation of the state.
In 2006 U.S economy was still suffering from the effects that the hurricanes such as Katrina had on the U.S. economy and because of their reverberations in 2006. The health of the national economy was facing threat, due to the severe beating that the infrastructure took—most notably the infrastructure for energy. For the preceding year and a half, energy prices had surged worldwide. When the storms hit at the end of August, economic activity had been quite robust for several years, supported by monetary accommodation and strong productivity growth. Real GDP had grown steadily at, or above, its potential or long-run sustainable pace, which is estimated at around three and a quarter percent. This pattern continued even during the third quarter—immediately following the hurricanes—when real GDP grew by just over four percent. In the fourth quarter, growth did drop sharply to about 1 ½ percent. However, a good deal of this slowdown appears to have been due to several temporary factors, none of which were related to the hurricanes.
In 2006 the US economy was facing a great deal of uncertainty; the economy appears to be approaching a highly desirable glide path. First, real GDP growth currently appears to be quite strong, but there was a good reason for it to slow to around its potential rate as the year progresses. Second, it appears that the US economy operating in the vicinity of “full employment” with a variety of indicators giving only moderately different signals.  ...Download file to see next pages Read More
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