Economic and Fiscal Outlook Peter R. Orszag Citigroup
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Economic and Fiscal Outlook Peter R. Orszag Citigroup
description
Economic and Fiscal Outlook Peter R. Orszag Citigroup. Recoveries tend to be sluggish following financial crises In 2007, private sector borrowing was 28% of GDP; in 2009 it was -17% of GDP The peak unemployment rate is reached from three to ten years after the crisis - PowerPoint PPT Presentation
Transcript of Economic and Fiscal Outlook Peter R. Orszag Citigroup
Economic and Fiscal Outlook
Peter R. OrszagCitigroup
• Recoveries tend to be sluggish following financial crises– In 2007, private sector borrowing was 28% of GDP; in 2009
it was -17% of GDP– The peak unemployment rate is reached from three to ten
years after the crisis• Housing is a key transmission mechanism
– Median housing prices are 15 to 20% lower in the decade after a crisis compared to pre-crisis levels
– Feedback loop: weak economy weak housing weak economy
• Political Polarization in the United States– Not caused by gerrymandering– Inertia does not lead to good outcomes (fiscal, climate,
etc.)– Learn to function with gridlock
Components of Growth
3/2006
6/2006
9/2006
12/2006
3/2007
6/2007
9/2007
12/2007
3/2008
6/2008
9/2008
12/2008
3/2009
6/2009
9/2009
12/2009
3/2010
6/2010
9/2010
12/2010
3/2011
6/2011
-10
-8
-6
-4
-2
0
2
4
6
Inventories Recovery ActNon-Inv, Non-Recovery Act Real GDP Growth
19701972
19741976
1978
1979/r1981
19831985
1987
1989/r1991
19931994
19961998
20002001
2002/r2004
2005
2006/r2008
20090
0.5
1
1.5
2
2.5
3
Homeowner Vacancy Rate, Single Units
Employment-Population Ratio
2012 2013 2014 2015 2016 2017 2018 2019 2020 20210.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
8.0%
9.0%
10.0%
Federal Deficit as % of GDP (CBPP policy assumptions, different economic assumptions)
CBO official economic as-sumptions
2.25 percent average growth
Medicare Spending Per Beneficiary by HRR, 2006
