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Macroeconomics - Essay Example

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As of May 30, 2013 release highlights of BEA, the real GDP grew at the rate of 2.4% in the 1st quarter of this year, which was better than the first quarters of 2010, 2011, and 2012. See Figure 1 in the Appendix Section. In terms of quarterly trend, the data in 2011 and 2012…
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Download file to see previous pages... In 2012, the performance for 2nd quarter was almost 50% lower than that of the first quarter.
It appears that the most significant growth takes place in the 4th quarter. That happened in 2009 and 2011, but certainly not in 2012. In 2010, the growth rates were somewhat evenly distributed in each of the four quarters.
Because of the recent thrust of the Federal Reserve to provide stimulus funds for the attainment of the ideal of full employment, 2013 should have a much higher growth rate and lower unemployment rate. On a per quarter basis, there is a 50% probability that the growth rate in the 2nd quarter will be higher than the first quarter. Since the 2nd quarter was lowest in 2009 and 2010, lower than the first quarter in 2012, but higher in 2011 than the first quarter, the probability of having a lower GDP growth rate is 75%. The 3rd quarter will be higher than the 2nd quarter and most probably higher than the 1st quarter since this is what happened in the past four years. By the 4th quarter, assuming no major calamities will disturb business operations, USA real GDP should experience the highest growth rate so far since the time of the recession.
First, it is because the Fed has been supportive of the need for more money supply. There is a determination to bring down the unemployment rate in the USA. The People have been complaining about the high unemployment rates and performance of the Monetary Board in easing the financial difficulties of the country for several years now. Secondly, the government is more prepared to adjust to unfavorable climate changes. And thirdly, there has been news about improvements in the way the economic problems in Europe are being handled, e.g. the way Greece economic crisis is being resolved. Europe is a major trading partner of the ...Download file to see next pagesRead More
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