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Diane Publishing Books
Economic Effects of Policies Contributing to Fiscal Tightening in 2013
Benjamin Page (au); Felix Reichling (au)
Substantial changes to tax and spending policies are scheduled to take effect in Jan. 2013, significantly reducig the federal budget deficit. However, the Congressional Budget Office (CBO) expects that even if all of that fiscal tightening occurs, real (inflation-adjusted) GPD will drop by 0.5% in 2013 -- reflecting a decline in the first half of the year and renewed growth at a modest pace later in the year. That contraction of the economy wll cause employment to decline and the unemployment rate to rise to 9.1% in the fourth quarter of 2013. After next year, economic growth will pick up, and the labor market will strengthen. However, even if all of the fiscal tightening was eliminated, the economy would remain below its potential and the unemployment rate would remain higher than usual for some time. Contents of this report: CBOäó»s Analytical Approach; Short-Term Effects of Policies Contributing to Fiscal Tightening; Longer-Term Effects of Policies Contributing to Fiscal Tightening. Tables and figures. This is a print on demand report.
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