This document analyzes the effects of deregulation on the economies of Delaware, South Dakota, and the United States from 1970-1998. It discusses how both states had economies highly dependent on single sectors (South Dakota on agriculture, Delaware on manufacturing) and faced economic struggles in the 1970s. In response, South Dakota and Delaware eliminated usury laws in 1980-1981 to attract the financial industry, hoping it would spur growth. The document examines data on each state and sector before and after deregulation, and presents an empirical model to analyze the long-term economic impacts.
IAR Public Policy Meetings, January 26, 2011.
Presented by Geoffrey J.D. Hewings, Director, Regional Economics Applications Laboratory - University of Illinois Institute of Government and Public Affairs
Ronald Reagan was elected president in 1980 on a platform of reducing the size and role of government. Known as "Reaganomics", his economic policies sought to lower taxes, reduce regulations, and control inflation. While critics argued it primarily benefited the wealthy, unemployment decreased during Reagan's terms and economic growth recovered after a recession. However, the national debt also increased substantially. Reagan's confrontational rhetoric towards the Soviet Union contributed to growing internal reforms and the eventual dissolution of the USSR in the early 1990s.
- Missouri is facing major budget issues as state revenues have declined significantly due to the economic downturn. Federal stabilization funds have helped but will run out, leaving a large shortfall.
- State revenues are down 10% in the first quarter of FY2010 and are projected to decline further. Unemployment will remain high.
- Governor Nixon has already implemented $200M in budget cuts for FY2010 but further cuts will likely be needed. The stabilization funds have masked the true budget problems.
- When the federal funds expire after FY2011, Missouri faces a major fiscal crisis without new revenue sources or job growth to boost the economy.
Paul Volcker was Chairman of the Federal Reserve from 1979 to 1987. He significantly raised interest rates, with the prime rate peaking at 21.5% in 1981, to curb rampant inflation. This caused a recession with unemployment rising to nearly 11%, but succeeded in reducing inflation below 4% for over 20 years. The high interest rates had global impacts, severely burdening developing nations with foreign debt repayments. Many Latin American and African countries had to formally renegotiate their debts in the 1980s, known as the "lost decade" for economic growth in those regions.
Ronald Reagan was elected president in 1980, defeating Jimmy Carter. Reagan implemented economic policies known as "Reaganomics" which aimed to lower taxes, reduce government spending and regulation, and control inflation. The Reagan years saw strong economic growth and falling unemployment, though budget deficits increased substantially. Meanwhile, Mikhail Gorbachev came to power in the Soviet Union and introduced reforms of openness (glasnost) and restructuring (perestroika) that helped lead to the end of the Cold War.
The document provides an economic update for the Denver metro area in 2010, summarizing key pieces of the economy that were affected by the recession, including consumer activity, housing, business activity, and government stimulus efforts. It analyzes data on GDP growth, consumer spending, unemployment, home sales, foreclosures, commercial real estate vacancies, and more. While some parts of the economy like consumer confidence and home prices were improving, unemployment was still rising and the full recovery remained uncertain. Government stimulus programs were helping offset state budget cuts and boost activity.
The document discusses trade issues facing the United States and proposals to address them. It argues that America's persistent trade deficits have cost the economy jobs and growth potential. Several trade problems are outlined, including currency manipulation, foreign consumption taxes, state-owned enterprises, and lack of a U.S. trade strategy. Alternative approaches are proposed that emphasize balanced trade, neutralizing unfair trade practices, and prioritizing national manufacturing and security needs over narrow trade deals. The Coalition for a Prosperous America advocates policy reforms to reduce trade distortions and help American producers compete globally.
During the Obama era, the President faced significant economic challenges including a recession and high unemployment. Through policies like the stimulus package and healthcare reform, unemployment was reduced and millions of jobs were created, although economic growth remained slow. Obama also withdrew troops from Iraq and focused on foreign policy issues like the Middle East and climate change in his second term. However, critics argue the stimulus failed to create sufficient jobs and the national debt increased substantially under Obama.
IAR Public Policy Meetings, January 26, 2011.
Presented by Geoffrey J.D. Hewings, Director, Regional Economics Applications Laboratory - University of Illinois Institute of Government and Public Affairs
Ronald Reagan was elected president in 1980 on a platform of reducing the size and role of government. Known as "Reaganomics", his economic policies sought to lower taxes, reduce regulations, and control inflation. While critics argued it primarily benefited the wealthy, unemployment decreased during Reagan's terms and economic growth recovered after a recession. However, the national debt also increased substantially. Reagan's confrontational rhetoric towards the Soviet Union contributed to growing internal reforms and the eventual dissolution of the USSR in the early 1990s.
- Missouri is facing major budget issues as state revenues have declined significantly due to the economic downturn. Federal stabilization funds have helped but will run out, leaving a large shortfall.
- State revenues are down 10% in the first quarter of FY2010 and are projected to decline further. Unemployment will remain high.
- Governor Nixon has already implemented $200M in budget cuts for FY2010 but further cuts will likely be needed. The stabilization funds have masked the true budget problems.
- When the federal funds expire after FY2011, Missouri faces a major fiscal crisis without new revenue sources or job growth to boost the economy.
Paul Volcker was Chairman of the Federal Reserve from 1979 to 1987. He significantly raised interest rates, with the prime rate peaking at 21.5% in 1981, to curb rampant inflation. This caused a recession with unemployment rising to nearly 11%, but succeeded in reducing inflation below 4% for over 20 years. The high interest rates had global impacts, severely burdening developing nations with foreign debt repayments. Many Latin American and African countries had to formally renegotiate their debts in the 1980s, known as the "lost decade" for economic growth in those regions.
Ronald Reagan was elected president in 1980, defeating Jimmy Carter. Reagan implemented economic policies known as "Reaganomics" which aimed to lower taxes, reduce government spending and regulation, and control inflation. The Reagan years saw strong economic growth and falling unemployment, though budget deficits increased substantially. Meanwhile, Mikhail Gorbachev came to power in the Soviet Union and introduced reforms of openness (glasnost) and restructuring (perestroika) that helped lead to the end of the Cold War.
The document provides an economic update for the Denver metro area in 2010, summarizing key pieces of the economy that were affected by the recession, including consumer activity, housing, business activity, and government stimulus efforts. It analyzes data on GDP growth, consumer spending, unemployment, home sales, foreclosures, commercial real estate vacancies, and more. While some parts of the economy like consumer confidence and home prices were improving, unemployment was still rising and the full recovery remained uncertain. Government stimulus programs were helping offset state budget cuts and boost activity.
The document discusses trade issues facing the United States and proposals to address them. It argues that America's persistent trade deficits have cost the economy jobs and growth potential. Several trade problems are outlined, including currency manipulation, foreign consumption taxes, state-owned enterprises, and lack of a U.S. trade strategy. Alternative approaches are proposed that emphasize balanced trade, neutralizing unfair trade practices, and prioritizing national manufacturing and security needs over narrow trade deals. The Coalition for a Prosperous America advocates policy reforms to reduce trade distortions and help American producers compete globally.
During the Obama era, the President faced significant economic challenges including a recession and high unemployment. Through policies like the stimulus package and healthcare reform, unemployment was reduced and millions of jobs were created, although economic growth remained slow. Obama also withdrew troops from Iraq and focused on foreign policy issues like the Middle East and climate change in his second term. However, critics argue the stimulus failed to create sufficient jobs and the national debt increased substantially under Obama.
The document provides an overview of key economic and political events during Barack Obama's presidency from 2009 to 2017. It discusses challenges Obama faced such as the recession and wars in Iraq and Afghanistan. It also outlines some of Obama's policy priorities like health care reform, stimulus spending, budget negotiations with Congress, immigration reform and climate change. Economic metrics during Obama's time like GDP growth, unemployment, income inequality and housing are addressed.
During the Obama era, the president faced significant economic challenges including a recession and high unemployment. While able to work with a Democratic congress initially, subsequent years saw more gridlock. Key issues included job growth, GDP levels, healthcare reform, budget deficits, income inequality, environmental policies and race relations. The administration cited positive statistics on private sector job gains but critics argued the recovery was weaker than other presidents.
The document discusses the history and role of the Federal Reserve, including how it responded during the financial crisis by lowering interest rates and purchasing mortgage and Treasury securities to stabilize markets. While some argue the Fed should be ended due to concerns over its private ownership and lack of audits, most experts agree that the Fed plays an important role in the economy and its quantitative easing programs have helped support economic recovery.
The document summarizes information about the national debt of the United States from the organization Fix the Debt. It discusses that the national debt is over $18 trillion and growing due to spending exceeding revenue in recent decades. It also notes that the debt levels threaten economic growth and flexibility and will require action to reduce the debt through tax and spending reforms.
Thirty years of growing income inequality, corporate tax cuts and personal tax breaks for the wealthy have undermined the livelihood of working people and set up a state budget crisis which does not need to
exist. We present alternative tax proposals and issue a warning of the ominous consequences of privatization, layoffs and state service cuts for all New Yorkers.
This is a big picture overview of the social and economic transformation of the USA in the last 20 years. Great wealth and prestige has been lost, the manufacturing and agriculture sectors have declined. The middle class has been decimated and great wealth inequality has been created. Government is under control of big corporations, especially in finance, and effective government agency has been lost.
Government spending has been steadily increasing over the past 40 years, even when adjusted for inflation and population growth. This rising government spending has caused economic growth and standards of living to slow down, with each successive decade seeing smaller gains. If current trends continue, future government spending will dramatically outpace GDP growth and cause the national debt to reach unsustainable levels, potentially limiting prosperity for future generations. Cutting government spending is necessary to increase economic growth and standards of living going forward.
The document discusses Vermont's fiscal challenges, including high taxes, growing spending outpacing revenue growth, stagnant private sector job growth, and an aging population. It argues Vermont needs to prioritize economic growth through private sector job creation to broaden its tax base, contain spending increases, and address its large unfunded liabilities to improve its long-term fiscal health.
Why we will not experience a DepressionGaetan Lion
- The document discusses how government interventions on an unprecedented scale, including fiscal stimulus packages, monetary policy actions, and financial industry bailouts, will help prevent another Great Depression.
- During the Great Depression, bad government policies exacerbated the situation, but current interventions aim to stimulate the economy and stabilize financial markets.
- Corporations, small businesses, and households have strong financial positions and ability to finance themselves, giving government policies time to take effect before a depression could occur.
The document discusses the history and current state of the U.S. public debt. As of November 2016, the debt was over $19.9 trillion, nearly double what it was in November 2008. Past administrations, including Reagan, Clinton, Bush, and Obama, pursued different strategies to manage the debt such as deficit reduction acts, stimulus packages, and quantitative easing. The Trump administration plans to focus on 4% GDP growth, trade reform, lowering interest payments on the debt, and budget cuts to entitlement programs to address the debt over the long run through policy changes rather than sole focus on debt reduction.
The document summarizes how the US national debt grew significantly over the past few decades. It traces the sources of debt to multiple wars since WWII, tax cuts in the 1980s that reduced revenues, increased military and entitlement spending, and the 2008 financial crisis. While debt decreased under President Clinton, it ballooned under Reagan and both Bush administrations. The Republican approach is criticized for disproportionately benefiting wealthy individuals and corporations through tax and regulatory policies.
The document summarizes key events leading up to and during the 2008 financial crisis. It discusses how the Federal Reserve lowered interest rates in the early 2000s, fueling a housing price bubble. It also explains how subprime lending increased and how financial innovations like collateralized debt obligations and credit default swaps contributed to increased leverage and risk in the system. When the housing market began to decline in 2006-2007 and subprime borrowers started to default, it led to a full-blown crisis in 2008 with the collapse of major investment banks and a stock market crash.
The introduction to Solutions for America highlights several key components of the document and discusses the role and necessity for change in America.
The newsletter discusses the growing economic divide in the US, with facts showing that the rich are getting richer while the middle class and poor are worse off. It argues the recovery reported in the news does not reflect most Americans' experiences. When the Federal Reserve stops stimulating the economy by buying bonds, interest rates will rise, which could trigger a recession worse than 2008 by hurting consumers and the housing/stock markets. The massive US debt also makes the economy vulnerable if interest rates return to historical levels.
The U.S. Baby Boomer mirage has been kept the importers of “stuff” into the United States with positive trade deficits happy. That is coming to an end.
El programa económico del Presidente BidenManfredNolte
Joe Biden tiene anti si una gigantesca tarea: deshacer la mala imagen de su antecesor pero emular sus incontestables éxitos económicos con acciones y políticas propias.
- Governments raise revenue through taxes, which are the single most important source of revenue.
- There are criteria for effective taxes including that they must not significantly distort economic behavior or damage incentives for productivity and growth. Taxes also should be fair and equitable in their impact.
- The economic impact of taxes includes how they can affect resource allocation, consumer behavior, productivity, and economic growth. The burden of a tax may not always fall directly on those being taxed.
This document discusses the economic environment that companies operate within. It covers major dimensions of international economic analysis including macroeconomic indicators like GNI, GDP, inflation, unemployment, debt, and income distribution. It also discusses different types of economic systems from market to command economies. Managers must understand the economic environment to anticipate changes and adapt their companies accordingly.
The document summarizes the economic situation in the United States from 1981 to 2011 under different presidents. It discusses Ronald Reagan's economic policies of reducing taxes and government spending which led to strong economic growth during his terms. It then discusses the policies and economies under George H.W. Bush, Bill Clinton, George W. Bush, including the 2008 financial crisis and recession at the end of Bush's second term.
Bernhard is a product that the assistant worked on while at Motif. The document appears to be a product brochure for Bernhard, though no details are provided about what Bernhard is or its features. The summary is only one sentence as the document contains very little information to summarize.
Albany Turnpike over CSXT Railroad Superstucture Replacement, East Chatham, N...dgonano
This document describes the superstructure replacement project for the Albany Turnpike bridge over CSXT Railroad in East Chatham, New York. The original 1906 bridge was structurally deficient, rated for only 4 tons. The project involved replacing the bridge superstructure with new steel truss girders and an exodermic deck while reconditioning the existing abutments. The replacement option was found to be more cost effective than rehabilitation. The new bridge provides improved load rating and vertical clearance while maintaining sight lines. Collaboration between the various partners helped ensure a successful outcome for the town and owner.
The document provides an overview of key economic and political events during Barack Obama's presidency from 2009 to 2017. It discusses challenges Obama faced such as the recession and wars in Iraq and Afghanistan. It also outlines some of Obama's policy priorities like health care reform, stimulus spending, budget negotiations with Congress, immigration reform and climate change. Economic metrics during Obama's time like GDP growth, unemployment, income inequality and housing are addressed.
During the Obama era, the president faced significant economic challenges including a recession and high unemployment. While able to work with a Democratic congress initially, subsequent years saw more gridlock. Key issues included job growth, GDP levels, healthcare reform, budget deficits, income inequality, environmental policies and race relations. The administration cited positive statistics on private sector job gains but critics argued the recovery was weaker than other presidents.
The document discusses the history and role of the Federal Reserve, including how it responded during the financial crisis by lowering interest rates and purchasing mortgage and Treasury securities to stabilize markets. While some argue the Fed should be ended due to concerns over its private ownership and lack of audits, most experts agree that the Fed plays an important role in the economy and its quantitative easing programs have helped support economic recovery.
The document summarizes information about the national debt of the United States from the organization Fix the Debt. It discusses that the national debt is over $18 trillion and growing due to spending exceeding revenue in recent decades. It also notes that the debt levels threaten economic growth and flexibility and will require action to reduce the debt through tax and spending reforms.
Thirty years of growing income inequality, corporate tax cuts and personal tax breaks for the wealthy have undermined the livelihood of working people and set up a state budget crisis which does not need to
exist. We present alternative tax proposals and issue a warning of the ominous consequences of privatization, layoffs and state service cuts for all New Yorkers.
This is a big picture overview of the social and economic transformation of the USA in the last 20 years. Great wealth and prestige has been lost, the manufacturing and agriculture sectors have declined. The middle class has been decimated and great wealth inequality has been created. Government is under control of big corporations, especially in finance, and effective government agency has been lost.
Government spending has been steadily increasing over the past 40 years, even when adjusted for inflation and population growth. This rising government spending has caused economic growth and standards of living to slow down, with each successive decade seeing smaller gains. If current trends continue, future government spending will dramatically outpace GDP growth and cause the national debt to reach unsustainable levels, potentially limiting prosperity for future generations. Cutting government spending is necessary to increase economic growth and standards of living going forward.
The document discusses Vermont's fiscal challenges, including high taxes, growing spending outpacing revenue growth, stagnant private sector job growth, and an aging population. It argues Vermont needs to prioritize economic growth through private sector job creation to broaden its tax base, contain spending increases, and address its large unfunded liabilities to improve its long-term fiscal health.
Why we will not experience a DepressionGaetan Lion
- The document discusses how government interventions on an unprecedented scale, including fiscal stimulus packages, monetary policy actions, and financial industry bailouts, will help prevent another Great Depression.
- During the Great Depression, bad government policies exacerbated the situation, but current interventions aim to stimulate the economy and stabilize financial markets.
- Corporations, small businesses, and households have strong financial positions and ability to finance themselves, giving government policies time to take effect before a depression could occur.
The document discusses the history and current state of the U.S. public debt. As of November 2016, the debt was over $19.9 trillion, nearly double what it was in November 2008. Past administrations, including Reagan, Clinton, Bush, and Obama, pursued different strategies to manage the debt such as deficit reduction acts, stimulus packages, and quantitative easing. The Trump administration plans to focus on 4% GDP growth, trade reform, lowering interest payments on the debt, and budget cuts to entitlement programs to address the debt over the long run through policy changes rather than sole focus on debt reduction.
The document summarizes how the US national debt grew significantly over the past few decades. It traces the sources of debt to multiple wars since WWII, tax cuts in the 1980s that reduced revenues, increased military and entitlement spending, and the 2008 financial crisis. While debt decreased under President Clinton, it ballooned under Reagan and both Bush administrations. The Republican approach is criticized for disproportionately benefiting wealthy individuals and corporations through tax and regulatory policies.
The document summarizes key events leading up to and during the 2008 financial crisis. It discusses how the Federal Reserve lowered interest rates in the early 2000s, fueling a housing price bubble. It also explains how subprime lending increased and how financial innovations like collateralized debt obligations and credit default swaps contributed to increased leverage and risk in the system. When the housing market began to decline in 2006-2007 and subprime borrowers started to default, it led to a full-blown crisis in 2008 with the collapse of major investment banks and a stock market crash.
The introduction to Solutions for America highlights several key components of the document and discusses the role and necessity for change in America.
The newsletter discusses the growing economic divide in the US, with facts showing that the rich are getting richer while the middle class and poor are worse off. It argues the recovery reported in the news does not reflect most Americans' experiences. When the Federal Reserve stops stimulating the economy by buying bonds, interest rates will rise, which could trigger a recession worse than 2008 by hurting consumers and the housing/stock markets. The massive US debt also makes the economy vulnerable if interest rates return to historical levels.
The U.S. Baby Boomer mirage has been kept the importers of “stuff” into the United States with positive trade deficits happy. That is coming to an end.
El programa económico del Presidente BidenManfredNolte
Joe Biden tiene anti si una gigantesca tarea: deshacer la mala imagen de su antecesor pero emular sus incontestables éxitos económicos con acciones y políticas propias.
- Governments raise revenue through taxes, which are the single most important source of revenue.
- There are criteria for effective taxes including that they must not significantly distort economic behavior or damage incentives for productivity and growth. Taxes also should be fair and equitable in their impact.
- The economic impact of taxes includes how they can affect resource allocation, consumer behavior, productivity, and economic growth. The burden of a tax may not always fall directly on those being taxed.
This document discusses the economic environment that companies operate within. It covers major dimensions of international economic analysis including macroeconomic indicators like GNI, GDP, inflation, unemployment, debt, and income distribution. It also discusses different types of economic systems from market to command economies. Managers must understand the economic environment to anticipate changes and adapt their companies accordingly.
The document summarizes the economic situation in the United States from 1981 to 2011 under different presidents. It discusses Ronald Reagan's economic policies of reducing taxes and government spending which led to strong economic growth during his terms. It then discusses the policies and economies under George H.W. Bush, Bill Clinton, George W. Bush, including the 2008 financial crisis and recession at the end of Bush's second term.
Bernhard is a product that the assistant worked on while at Motif. The document appears to be a product brochure for Bernhard, though no details are provided about what Bernhard is or its features. The summary is only one sentence as the document contains very little information to summarize.
Albany Turnpike over CSXT Railroad Superstucture Replacement, East Chatham, N...dgonano
This document describes the superstructure replacement project for the Albany Turnpike bridge over CSXT Railroad in East Chatham, New York. The original 1906 bridge was structurally deficient, rated for only 4 tons. The project involved replacing the bridge superstructure with new steel truss girders and an exodermic deck while reconditioning the existing abutments. The replacement option was found to be more cost effective than rehabilitation. The new bridge provides improved load rating and vertical clearance while maintaining sight lines. Collaboration between the various partners helped ensure a successful outcome for the town and owner.
Wales Cottage Holidays is sending out a Christmas mail shot to promote holiday rentals. This project was designed by the assistant during their time working at a design company. The mail shot aims to attract customers to book Christmas and New Year holidays at cottages in Wales.
This short document promotes the creation of Haiku Deck presentations on SlideShare by providing an example Haiku Deck presentation and encouraging the reader to "GET STARTED" making their own. It displays a stock photo with text suggesting the reader may feel "Inspired" by the example presentation.
HydroTechnik was working on a design project that the document's author had worked on during their time at Motif. The document appears to be about a mail shot for HydroTechnik but provides little other context or information about the project.
ventajas y desventajas del uso del internetPili Roojx
Este documento describe las ventajas y desventajas del uso de Internet. Entre las ventajas se encuentran que facilita la comunicación y búsqueda de información de forma sencilla. Sin embargo, también tiene desventajas como la exposición a contenido inadecuado y la generación de dependencia del Internet. Además, explica los componentes hardware y software que componen una computadora.
This advertisement for tea council features a man in a suit drinking tea in a dark room illuminated only by the tea cup, pot, and table props. The camerawork consists solely of close-up angles of the tea being poured and the man relaxing as he drinks, with minimal movement of pouring the tea and taking a sip. The slow pacing and non-diegetic sound of narration describing the tea and background music aim to focus full attention on enjoying the tea.
El plan de proyecto se enfoca en productos de limpieza de alta calidad para satisfacer las necesidades de los clientes. La empresa busca distribuir sus productos en tiendas pequeñas y supermercados para cubrir las necesidades de limpieza de los hogares y contribuir a una mejor salud. El objetivo final es establecerse en el mercado y expandirse a otros departamentos del país.
Delta Desarrollo Gráfico es una empresa mexicana dedicada al desarrollo gráfico y de marcas. Ofrece servicios como identidad de marca, diseño de empaques, estrategias de marca, cuidado de la marca, desarrollo interactivo y asesoría sobre posibilidades de negocio. Su enfoque se basa en la creatividad, los detalles, la amabilidad, el interés en los clientes y el uso de la última tecnología.
The document outlines AdaCore's product roadmap for 2013-2015, including planned releases of GNAT Pro, CodePeer, GNATbench, SPARK Pro, and new tools. Key points include:
- GNAT Pro 7.2 release in November 2013 with over 120 new features and Ada 2012 support.
- New tools like gnat2xml to generate XML from Ada sources and an improved gnatpp.
- Support for new platforms/OSes in GNAT Pro 7.2 like ARM bare board and Android.
- Future releases of tools like CodePeer, GNATcoverage, GNATemulator planned for 2014-2015 with new features and capabilities.
Introduction to Git source control, i will start a simple series as quick start to you for Git, this is only part 1, after finish it you will get the concept behind Git with simple example
Reducing Chronic Absenteeism through Neighborhood Engagement LiteracyCenter
This document discusses barriers to academic success such as absenteeism and proposes solutions implemented through LINC. It addresses challenges related to place, people, and partnerships. LINC takes a holistic approach to connect communities to opportunities through programs in economic development, education, housing, and resident services. This involves partnerships across organizations to produce real impact such as increased parent involvement in schools and measurable gains in student attendance.
Earth art, also known as land art, earthworks, or environmental art, involves creating artworks directly in nature using natural materials like stones, leaves, mud, and twigs. The document discusses several earth artists like Andy Goldsworthy, Robert Smithson, and Richard Long. It provides examples of their artworks, which are typically large-scale sculptures or installations created outdoors using materials found in the natural environment. The emergence of earth art in the 1960s-70s was influenced by a reaction against commercialism and a desire to create art outside the gallery setting and integrate it with the natural world.
The document provides an overview of the United States economy including key statistics such as GDP, GDP growth rate, GDP per capita, inflation rate, labor force statistics, unemployment rate, main industries, electricity production, oil production and reserves, poverty levels, and national debt. It discusses the country's economic history, monetary policy, government intervention in the economy, and predictions about the future direction of the US economy.
An Analysis Of The Financial Crises Of The Past Centuryiosrjce
The document analyzes several major financial crises that occurred in the past century, including:
1) The Great Depression of the 1930s, which began with the 1929 stock market crash and led to high unemployment and many bank failures in the US and worldwide.
2) The 1970s Oil Crisis caused by OPEC oil embargoes that led to spikes in oil prices and impacted many industries and the global economy.
3) The 1997 Asian Financial Crisis that began in Thailand and spread to other Asian countries, requiring a $40 billion IMF bailout.
4) The 2000 Dot-Com Bubble burst as overvalued technology stocks crashed with the slowing economy.
5) The 2007-2008
Why Today Is Different From The Great Depressiongueste37a64
While there are some similarities between today's financial crisis and the Great Depression, such as excessive debt and asset price deflation, there are also key differences:
1) The economic contraction today is far less severe, with estimates of unemployment peaking at around 10% compared to 25% during the Depression.
2) The banking system, while distressed, is not near collapse as hundreds of banks failed during the Depression due to lack of deposit insurance.
3) Monetary policy response has been extraordinary, with the Federal Reserve taking ambitious action unlike the passive role during the 1930s.
4) Government policy response has already been more forceful than in the early years of the Depression, enacting stimulus packages, bank
The document compares and analyzes the similarities and differences between the 1980s savings and loan crisis and the 2008 subprime mortgage crisis. It provides background on what triggered each crisis, statistics on their costs and impacts, timelines of key events, comparisons of the underlying causes, and summaries of the government actions taken in response to each crisis.
The stagnant u.s. economy and the imbalances of savings and incomesFederico Dominguez
This document provides an analysis of the 2008 financial crisis. It discusses how financial deregulation in the late 1990s/early 2000s allowed large financial institutions to combine commercial and investment banking, which increased risk. Easy monetary policy and high commodity prices fueled a housing bubble from 2001-2005. Complex financial instruments like securitization and credit default swaps spread risk throughout the system but also enabled speculation. The crisis erupted in 2008 when the housing bubble burst, exposing overleveraged financial institutions and precipitating a broader economic crisis.
East Asia experienced extensive economic growth in the second half of the 20th century while Latin America saw stagnated growth and decline. This was largely due to differences in total factor productivity. Latin America adopted import substitution industrialization which led to inefficient state-owned enterprises, high inflation, and vulnerability to external shocks. In contrast, East Asian countries limited government intervention and inflation while promoting exports, education, savings, and sustainable growth through balanced budgets and market policies. As a result, East Asia saw investment exceed 20% of GDP annually and rapid growth, while Latin America suffered from low productivity following economic shocks.
The document provides details about the Great Depression that occurred from 1929 to the late 1930s. It describes how the stock market crash of 1929 led to widespread bank failures as people withdrew their deposits. This caused many businesses to cut wages or lay off workers, resulting in high unemployment. Some key effects included a 30% drop in GDP, mass unemployment, reduced industrial production and exports, and social impacts such as migration within the US. The Depression affected other countries globally due to reduced international trade and their dependence on exporting to the US and other nations.
The document discusses the national debt of the United States, which currently stands at over $18 trillion. It explores the history of rising US debt levels and the economic effects of increasing versus consolidating the debt. Increasing debt leads to higher interest rates, less investment, and reduced GDP growth. Consolidating debt has short-term negative effects but long-term benefits like lower interest rates and more funding for programs. The document also examines threats of sovereign default and financial crises based on examples from other countries.
This document compares and analyzes the evolution of economic thought during the Great Depression and Great Recession. It discusses key events of each period like the stock market crashes, as well as government and economic policy responses. During the Great Depression, policies focused on ensuring employment through programs like the New Deal. During the Great Recession, policies addressed concerns about income inequality through stimulus packages and debates around minimum wage. The document also analyzes how economic models like the quantity theory of money influenced policy approaches during each period.
The document discusses the American Recovery and Reinvestment Act (ARRA) of 2009, which provided $48 billion in stimulus funding for transportation projects. It explores the difficulties in estimating the economic impacts of such a large stimulus program. Research found that state highway spending increased by 50 cents to 75 cents for each $1 of ARRA highway grants received by a state. While precisely measuring impacts is challenging, analysis of multiple data points suggests that without ARRA funding, national highway spending would have declined 20% from 2008 to 2011.
The document discusses the economic crisis in Venezuela. It describes how Venezuela's economy is heavily dependent on oil exports, which account for over half of GDP. When global oil prices declined sharply in 2014-2015, Venezuela's economy nosedived into a severe crisis. Inflation skyrocketed as the currency lost value. Shortages of food, medicine and other basic goods became widespread as the government struggled to pay its bills. The crisis has led to political instability and unrest as the population grows increasingly impoverished.
Chapter 20 Resurgence of Conservatism.pptxRyanMcElroy13
This document provides an overview of events during Ronald Reagan's presidency from 1980-1992, including his economic policies known as "Reaganomics", increases in military spending and the national debt, deregulation of industries, Supreme Court nominations, and foreign policy decisions. The Iran-Contra affair is summarized as a scandal involving secret arms sales to Iran and funding of Nicaraguan Contras in violation of Congress. Reagan's interventions in Central America, including support for El Salvador's government and funding Contras to overthrow Nicaragua's Sandinista regime, are also covered.
1. Identification and Analysis of the effects from deregulation on Delaware, South Dakota and
the United States: 1970-1998
William Compton
February 3, 2011
2. 1. Introduction.
Throughout the 1900s, the United States economy has been placed on a roller coaster of
regulation and deregulation. Most of the decisions to impose further regulation or relax current
regulations have been made in response to economic distress. The goals of the authorities
making these decisions are often to spur short term growth, and are designed to pull us out of the
red and back into the black. The short run effects may have been favorable; however, these
decisions were made sporadically, with little thought focusing on the long term effects to the
economy. Economists generally favor less regulation as opposed to more regulation depending
on the individual circumstances. When deregulation does occur, the full impact of potential long
run growth isn’t always realized right away.
An example of such regulation and deregulation comes from the American airline
industry. In 1938, congress passed the Civil Aeronautics Act in an effort to save a threatened
and declining airline industry. The act created a control board with the authority to control entry
and exit, as well as market competition. The industry remained regulated until 1978 where slow
economic growth, high inflation, high interest rates, and severe fuel supply shocks of the late
1960s and early 1970s, coupled with rapidly advancing technological change, forced congresses
to respond with the Airline Deregulation Act. From then on, the airline industry was placed in
the hands of competitive market forces. Since this deregulation, the airlines industry has
boomed. Companies are now quick to adopt new technologies, to provide more efficient
services, and increased competition has kept prices for air travel low.
The financial industry is a very large piece of the economy but there is disagreement on
the level of impact it has in economic growth. Early studies by Robinson (1952) and Solow
(1956) argue that financial institutions play a minor role in economic growth. More recent
3. studies from McKinnon (1973), Shaw (1973), Levine and Zervos (1993), and Abrams, Clarke
and Settle (1999) suggest otherwise. Like the airline industry, the financial industry has
followed a similar pattern of regulation and deregulation. The Federal Reserve was created in
1913 in response to a series of financial panics, with the panic of 1907 being the climax. In
1907, the New York Stock Exchange fell 50% from the previous year and caused a tremendous
loss of confidence in the financial system. There were numerous bank runs which led to
widespread panic, and resulted in the bankruptcy of many local banks and businesses. Similarly,
the Federal Deposit Insurance Corporation followed was created in 1933 in response to
widespread bank failures, with the attempt to restore confidence in the banking industry. These
regulatory institutions are still in existence today despite constant criticisms of the Federal
Reserve.
State level financial regulatory change has been observed as well. In the United States,
each state had its own independent law on the level of interest that an individual could be
charged before it was determined unlawful, a usury law. This was a regulatory ceiling on the
amount of interest someone could be charged. In 1980, high inflation rates pushed up the
nominal interest rate required for credit card agencies to charge to earn a profit. These rates were
often above the regulatory ceiling placed by the state government. Due to the lack of
profitability available, credit card companies looked to the government to relax the regulations
on state usury laws.
In 1978, the credit card companies received some help from a Supreme Court ruling in
the case of “Maquette National Bank of Minneapolis v. First Omaha Service Corp.” The court
ruled that a financial institution could charge people in other states the highest interest rate
allowed in their home state. South Dakota in 1980 and Delaware in 1981 saw this as a huge
4. opportunity to gain attract new financial industry and employment to their states. They enacted
legislation to eliminate usury laws and targeted credit card companies to relocate within their
borders. By acting as first movers, these two states hoped to quickly turn around their economic
situations and significantly expand growth.
About thirty years have passed since the aggressive moves by Delaware and South
Dakota allowing for examination of each states long run growth from expansion of the financial
sector. This natural experiment allows me to examine the period before and after the relaxing of
financial regulation and observe the long run effects on growth for each state in the United
States.
Section 2 of this paper examines South Dakota and Delaware before the reform. Section
3 examines the expected impact to South Dakota, Delaware, and the rest of the United States
following the financial deregulation. Section 4 examines the data used in my analysis and
presents the empirical model. Section 5 contains the findings from the model and section 6
provides the conclusion to my study.
2. South Dakota and Delaware before 1980
During the 1970s, South Dakota was the most agriculturally dependent state in the whole
United States, with about 20% of its GDP attributed to agriculture. From 1970-1979 South
Dakota’s economy grew on average only 1.7 %. South Dakota needed a major change because
they were going nowhere fast. They suffer geographically from their location as well as their
environment as a whole. Table 1 shows agriculture output compared to financial output for the
United States and the six most agriculturally dependent states in the nation for selected years
between 1970 and 1997. From the table you can see the United States percentage of GDP
6. Figure1
Agriculture vs. Finance % GDP
0
0.05
0.1
0.15
0.2
0.25
0.3
0.35
1969
1971
1973
1975
1977
1979
1981
1983
1985
1987
1989
1991
1993
1995
1997
Years
Percentages
US-AG US-FIN SD-AG SD-FIN
attributed to agriculture steadily declined from 1970 to 1997. Although South Dakota’s
dependence also declined, it remained the highest out of all five states 27 years later.
Figure 1 shows the changes of agriculture compared to finance as a percentage of GDP
for South Dakota and the United States from 1967 through 1997. You can see that South
Dakota’s dependence on agriculture has been relatively high compared to the United States
dependence throughout the thirty year period. During 1980, figure 1 shows a large decrease in
7. agriculture as a percentage of GDP. Table 1 shows that from 1979-1980 agriculture output as a
percentage of GDP fell from 19% to 13.5%. This was due to a major drought in 1980 that placed
economic pressure for change in South Dakota.
Delaware, like South Dakota, had major economic dependence on one sector. From the
1950s through the 1970s, Delaware concentrated most of its output in the manufacturing
industry, focusing mainly on automobile assembly and chemicals. E.I. du Pont de Nemours and
Company, or commonly known as DuPont, was Delaware’s one headed monster and was a major
producer of war supplies. After the end of World War II, output demand could not continue at
its current rate and Delaware’s dependence on the manufacturing sector started to hurt the state.
Delaware suffered a mild economic recession during the 1970s with an average employment
growth of only 1.3% for the period 1970-1980. Table 2 lists manufacturing output vs. financial
output as a percentage of GDP for the United States and the six most dependent states on the
manufacturing sector. In 1970, Delaware was the 4th
most dependent state in the Country on the
manufacturing sector at 36% of GDP. By 1997, Delaware’s dependence on manufacturing fell to
15.8% and last out of the top six states. Figure 2 shows Delaware’s manufacturing and finance
sector versus the United States manufacturing and finance sector from 1969-1997. Figure 2
Table 2
Comparison of Manufacturing and finance as a percentage of Gross Domestic Product
State/Year Sector 1970 1980 1981 1982 1990 1997
United States
Manufacturing 0.24425
0.21281
1
0.21014
4
0.19938
3
0.18076
4 0.166719
Finance
0.02703
5
0.03167
1 0.03382
0.03355
7
0.04118
1 0.050037
Connecticut
Manufacturing
0.33516
9
0.28332
1
0.27457
2
0.26898
6
0.19256
5 0.162824
Finance
0.02073
8
0.02526
4
0.03076
1
0.02745
2
0.03956
3 0.052887
Delaware Manufacturing 0.36102 0.33616 0.34687 0.32448 0.23058 0.158792
9. Due to the changes in the United States economy, Delaware and South Dakota could not
keep the current economic structure. They needed to take on new industry and congress gave
them the perfect opportunity. South Dakota acted first in 1980 with Governor William Janklow
pushing the legislation through the States legislature. In response, the large credit card company
Citibank, quickly packed their bags and moved within the borders of South Dakota. One year
later, Delaware followed South Dakota’s lead passing their own legislation to eliminate usury
laws with the help of Governor Pierre S. du Pont IV.
3. Expected Effects to SD, DE, and the United States from Deregulation.
The ceilings imposed on the financial industries through usury laws reduced the amount
of people that could obtain credit. Since the interest rate tops out at an artificial level, for
example 6%, people with greater default risk requiring a higher interest rate could not obtain
credit. This reduces output from the financial industries who realize a loss in potential profits.
There was an additional cost imposed by the usury laws a well. High nominal borrowing costs
caused financial agencies to have to lend at high rates of interest, even to people will low risk of
default. The usury laws reduced or eliminated all profitability of lending to anyone. When
South Dakota and Delaware eliminated their usury laws, they created a huge incentive for
financial agencies to relocate within their borders to dramatically increase output and profits.
People who could not obtain credit before could now obtain credit if they wanted, but at an
interest suited for the risk they brought to the table. Because Delaware and South Dakota were
the first movers in eliminating usury laws, they gained a large portion of the national financial
market share. From all the new corporations that relocated to these two states, within a few
years both states financial sectors began to grow rapidly. Table 1 and 2 show the shares of the
newly defined financial sector as a percentage of GDP for South Dakota and Delaware. In 1970,
10. South Dakota’s financial sector comprised 3% of its GDP, while Delaware’s represented 2.6% of
its GDP. In 1990 both states financial sector shares grew to 8.3% and 17.4% respectively.
Looking at figures 1 and 2, they show financial growth of South Dakota and Delaware from
1970 through 1997. Looking at each figure, one can observe clear growth in each states financial
sector. Though each state realized rapid growth, South Dakota’s growth reached its peak at
about 1987 then declined and plateaued at about 9%. Delaware’s growth continued through
1993-1994 at the level of 23%. Delaware gained its advantage from its central location in the
Northeast corridor and its location near another financial hub, New York.
Almost every state had eliminated their usury laws by 1982 (Ellis), and this certainly
would have played a role in the expansion of the entire financial industry in the United States.
The impact of the other states did not compare to the magnitude of first movers South Dakota
and Delaware, but other states may have benefited from the deregulation. Although Delaware
and South Dakota attracted a large portion of the market not all of the financial firms moved and
remained in their current states. The financial firms would have increased output and profit the
same as the firms that relocated, just a couple of years later. The long run effects can be seen in
figure 1, looking at the United States financial sector growth. There is a slight, steady growth
starting about 1981-1983 and stretching through 1997 that undoubtedly can be attributed to the
deregulation. Deregulation not only increased output in existing financial firms, other firms
came into existence because of the increased profits that could then be realized. New financial
products would be introduced and the financial boom had officially begun.
My goal of this paper is to quantify the effects of the 1980 deregulation for South Dakota,
the 1981 deregulation for Delaware, and the 1982 deregulation for the rest of the United States. I
will be running a linear ordinary least squares block diagonal regression on a balanced panel
11. sample from 1970-1998. The regression will quantify the individual effects for Delaware and
South Dakota. I will run another model will be run on the same balance panel identifying the
effects on the United States as a whole.
4. Data and Model.
The data used for the empirical model consists of a sample of all 50 U.S. states plus
Washington DC for the period 1970-1998. The chosen period is sufficiently long enough to
capture any long run effects of the deregulation for South Dakota, Delaware, and the rest of the
United States. From the sample I have 29 sets of observations for each of 51 cross-sections,
giving me a total of 1508 observations. To assess the effects due to the elimination of usury
laws, I estimated an empirical model examining per capita real total state income growth and
annual employment growth. The data used was gathered from the Bureau of Economic Analysis
under regional statistics. All income data was converted to real terms using the Consumer Price
Index with 1982-1984 being the base years.
According to the Neo-Classical growth (exogenous growth) model, growth of individual
states can only be affected in the short run as they converge to a new steady state equilibrium.
The growth rate of convergence to the steady state is determined by capital accumulation which
is determined by the savings rate. As people invest in financial products, they are in turn saving
their money instead of consuming it. As the financial industry expanded from the deregulation
in 1980-1982, saving became easier and convergence should have sped up. The only thing that
can affect the long run growth rate is a change in resources and technology which are
exogenously determined. There is no doubt that our country expanded its technology greatly
throughout the 1980s and 1990s taking us to greater steady state equilibriums. According to
Robert Barro and Xavier Sala-i-Martin, states should converge, at least conditionally, to the same
12. equilibrium level of output per capita (Barro and Sala-i-Martin, 1991). Once each state reaches
the new steady state equilibrium, each states growth should be driven by the growth of the
United States economy as a whole, allowing for any change in a states sectoral composition.
To measure the affect on South Dakota from their deregulation, two models were
estimated measuring their real per capita total state income growth and employment growth. To
capture Delaware’s effect, two more models were estimated using the same dependent variables.
To capture the affect of total elimination of all usury laws on the United States as a whole, the
same two dependent variables were used in two more models. In South Dakota’s models, a
dummy was inserted measuring the effect of the deregulation from 1980 on. The same dummy
was included in Delaware’s models, only it measured the effect from 1981 on. To measure the
effect of the deregulation on the United States, a dummy was included to measure the affect from
1982 on.
To capture the affect of the neoclassical growth model, I compared each states yearly
growth with the national yearly growth rate. The expected coefficient for national growth rate
will have a positive sign indicating that when the national economy grows, each state economy
will also grow. To account for change in a states sectoral composition, I included a weighted
average variable WA_SUM, defined as:
WA_Sumit = ΣWijt-1(Aijt)
Where the subscripts i and t denote state i at time t, j is one of the nine included sectors:
Agricultural; Mining; Construction; Manufacturing; Transportation and Public Utilities;
Wholesale and Retail Trade; Finance, Insurance, and Real Estate; Services; and Government. W
is the weight of each sector in a state’s personal income and A is the national average of per
capita personal income that originates in sector j at time t. This variable controls for national
13. influences and will be the main variable indentifying growth in the change of the sectoral
compositions from deregulation. I expect that this coefficient will be positive.
The next independent variable included was a variable that measured the financial depth
of each state. This variable was the sum of all depository institutions, non-depository
institutions, security brokers, commodity brokers, holding offices, and other investment offices
as a percentage of total state income. It measures the level of financial assets held by each state
and is entered in log form into the model. I expect this coefficient to be positive because of the
major increase in the financial industry expected after the deregulation.
To measure individual state effects that took place outside of the model in the collective
U.S. model, fixed effects were included giving each state an individual constant. Also random
effects will be run for this model to conduct a Hausman test comparing random effects and fixed
effects, and determining the best estimated coefficients for the model. An AR(1) term was
entered into the models that showed evidence of autocorrelation.
5. Results.
Table 3 reports the results of the block diagonal regressions on both of Delaware’s
growth equations. For the annual employment growth model, the Delaware specific constant
term gives a t-stat with an absolute value of .8711 which suggests that it is not significant at the
90% level. A Wald test of the coefficient confirms this. This means that no other effects not
included in the model played a significant role in employment growth during the period 1971-
1998. The coefficient for the national growth rate is 1.044 and has the expected sign. The
coefficient states that Delaware and the United states employment grows at about the same rate.
This gives strong evidence for the Neo-Classical growth model and that Delaware over the 29
year period has reached the steady state equilibrium for employment growth. The t-stat
14. accompanied with the coefficient is 7.27 suggesting its significance at the 99% level, and a Wald
test confirms its significance. The variables weighted average and financial depth report t-stats
of 1.41 and .177 respectively. This would signify that the weighted average is significant and
financial depth is not significant, but Wald tests of both coefficients conclude that both variables
do not significantly affect annual employment growth for Delaware in the sample period. The
dummy variable for 1981 proved significant at the 95% level with a t-stat of 2.229 and a Wald
test to confirm its significance. The coefficient for the dummy is .023, signifying that after 1981;
Delaware’s employment grew at an additional 2.3% per year after the deregulation.
Delaware’s per capita total state income growth model reports that the variables: national
growth rate, financial depth, 1981 dummy, and the constant all significantly affected Delaware’s
growth during the sample period. The constant and financial depth are both significant at the
95% level, and weighted average and 1981 dummy are significant at the 99% level. Weighted
average and the 1981 dummy have the expected positive coefficient. Financial depth has an
unexpected negative coefficient, although it is very small. The negative financial depth
coefficient signifies that state growth is hindered with more financial assets in holding by the
financial sector. The significant constant signifies that other forces not included in the model
played a significant role in Delaware’s per capita income growth. All variables significance, or
lack there of, were confirm through Wald tests as well as t-statistics. Both models for Delaware
lost one observation correcting for autocorrelation.
Table 4 reports the results for both of South Dakota’s growth equations. Like Delaware,
the variables weighted average, financial depth and the constant all proved insignificant for
employment growth. Also like Delaware, the national growth rate significantly affected the
growth rate of South Dakota 1 to 1. Unlike Delaware, the 1980 dummy did not play a significant
15. role in the annual employment growth throughout the sample period. Growth was affected by
looking at the data in the short run, but throughout the whole sample period the deregulation did
not come through as a significant effect. All significance levels were double checked through t-
statistics and Wald tests.
For South Dakota’s second model on real per capita total state income growth, the
variables weighted average, financial depth, and the constant were all significant at the 90%
level. The variable weighted average is significant at the 99% level. Like the previous model on
employment growth, the 1980 dummy did not play a significant role in South Dakota’s growth
throughout the sample period. The large negative, significant coefficient for the weighted
average variable signifies that even with the change in sectoral composition towards the finance
sector, South Dakota is still very sensitive to shocks in other possible sectors. South Dakota was
still very heavily dependent on agriculture despite the increased financial sector. The United
States was turning away from agriculture and this may have had a significant affect on the
weighted average for South Dakota.
Tables 5 and 6 report the results of grand regressions estimated to identify the effect of
the 1982 deregulation on the United States as a whole. Table 5 has the estimates for random
effects and table 6 has the estimates for the fixed effects. All grand regression models were
estimated using the 1970-1998 sample. Both models for annual employment growth and annual
real per capita total state income growth were presented. A Hausman test statistic of .001 for
real per capita growth is compared to a critical value of 9.49. Comparing the two statistics, I
conclude that the fixed effects are consistent but inefficient because of the loss of data. The
Random effects prove to be consistent and efficient. Since the random effects are superior to the
fixed effects I focus on table 5 for employment growth. Weighted average, financial depth,
16. National Growth rate, and the collective constant all prove significant at the 99% level.
Weighted average and national growth rate report positive signs consistent with expectations.
Financial depth continues to report a negative coefficient. The 1982 dummy proves to not
significantly affect the United States as a whole. I performed a Chow test on the fixed effect
model to see if each state would report a consistent specific constant term. The null hypothesis
was rejected and I concluded that the fixed effects were consistent if used.
For the second model testing the real per capita total state income growth, a Hausman test
was perform testing the random effects against the fixed effects. The test presented the same
results as the employment growth model, concluding in favor of the random effects. Focusing
on table 5, the variables weighted average, financial depth, and the constant all were significant
at the 95% level. National growth continued to be highly significant at the 99% level. The 1982
dummy proved insignificant in the random effects model, but if we looked at the fixed effects
model it proved significant at the 90% level. A Chow test was also constructed for the fixed
effects model and concluded that the individual state constants were significant and consistent.
Table 7 reports the means and standard deviations for South Dakota, Delaware and the
United States for the period 1970-1980 before the deregulation and the period 1981-1998 after
the deregulation. For employment growth, South Dakota, Delaware and the United States all
experienced a slight decline in their standard deviation from the period before the deregulation
compared to the period after. Average employment growth also increased for South Dakota and
Delaware even though it declined in the United Stats as a whole. Looking at per capita income
growth Delaware and the United States experience a decline in standard deviation; however
South Dakota experiences a much larger decline from .13 to .03. Despite the United States slight
increase in average per capita growth between the two periods, Delaware and South Dakota both
17. experienced a large growth in their average growth rate from the period before the deregulation
to the period after the deregulation.
6. Conclusion
In an attempt to escape their current economic hardship, South Dakota and Delaware
attempted to change their sectoral composition. In 1980 and 1981, they passed legislation that
eliminated usury laws and created huge incentives for financial firms to relocate within their
borders. Because they were first movers, they gained much of the market share in the United
States, particularly in the credit card sector. With Delaware being located on the east coast, its
prime location allowed them to attract a larger share of the market than South Dakota. Looking
at the raw data, it is clear that Delaware fared much better than South Dakota. South Dakota
experienced short run growth but remained heavily dependent on agriculture. Delaware
experienced long term growth and moved away from a dominant manufacturing sector towards a
strong financial sector.
Examining the regressions for employment growth and real per capita total state income
growth, South Dakota did not show any significant long term effects in either category.
Delaware showed strong effects in both categories, but was stronger in the per capita income
growth. Despite South Dakota’s small responses to the financial data, they did manage to move
away from an extremely heavy reliance on the agriculture sector and lessened their growth
volatility.
Delaware was small in size, and both Delaware and South Dakota were small in their
relative economy size. They had hoped to significantly improve their economies by acting as
first movers in the elimination of their usury laws, but Delaware enjoyed most of the spoils due
18. to its excellent geographic location and its close proximity to large cities such as Washington
D.C., Baltimore, Philadelphia, and New York City.
References.
Abrams, Burton A, Margaret Z. Clarke, and Russell F. Settle (1999). "The Impact of Banking
and Fiscal Policies on Economic Growth." Southern Economic Journal 66, 367-378.
19. Barro, Robert J, and Sala-i-Marin, Xavier (1991). “Convergence across Regions and States.”
Brookings Papers on Economic Activity. No. 1, pp. 107-182.
Ellis, Diane (1998). “The Effect of Consumer Interest Rate Deregulation on Credit Card
Volumes, Charge-Offs, and the Personal Bankruptcy Rate.” Federal Deposit Insurance
Company, Bank Trends, 98-05.
Levine, Ross, and Sara J. Zervos (1993). "What have We Learned about Policy and Growth from
Cross-country Regressions?" American Economic Review 83, 426-430.
McKinnon, Ronald I. (1973). "Money and Capital in Economic Development." Washington, DC:
Brookings Institution.
Robinson, J. (1952). “The Rate of Interest and Other Essays.” London: Macmillan
Shaw, E.S. (1973). "Financial Deepening in Economic Development." New York: Oxford
University Press.
Solow, Robert (1956). "A Contribution to the Theory of Economic Growth." Quarterly Journal
of Economics 70, 65-94.
Table 3
Delaware Growth Equations
20. Dep. Variable
Annual
Employment
Growth
Annual Growth
in Real Per
Capita Total
State Income
Sample 1970-1998 1970-1998
Variable Coefficients
Constant -0.034089 -0.032262
(0.871197) (2.23533)
National Growth Rate 1.044609 1.033192
(7.274253) (7.307788)
Weighted Average 0.173151 -0.076197
(1.412111) (0.716882)
Financial Depth -0.001542 -0.007694
(0.177245) (2.321601)
1981-Dummy 0.023829 0.01211
(2.229644) 3.661067
AR(1) 0.473527 -0.472906
(2.738672) (2.492848)
Durbin-Watson 1.976895 2.066984
Adj R2
0.705594 0.601287
Absolute values of t-stats in parentheses
Both models lost one observation to Autocorrelation
Both models were estimated Using a block-diagonal regression
to identify Delaware individual effects on the entire panel
sample.
Table 4
South Dakota Growth Equations
21. Dep. Variable
Annual
Employment
Growth
Annual Growth
in Real Per
Capita Total
State Income
Sample 1970-1998 1970-1998
Variable Coefficients
Constant 0.130132 -0.470492
(0.868599) (1.245833)
National Growth Rate 0.619977 2.222813
(3.354365) (4.157519)
Weighted Average -0.044834 -1.188179
(0.180503) (2.028404)
Financial Depth 0.028289 -0.13147
(0.816871) (1.430817)
1980-Dummy -0.012775 0.019465
(0.691934) (0.465404)
AR(1) 0.259945 -0.194623
(1.167869) (1.325171)
Durbin-Watson 1.959104 2.11512
Adj R2
0.713152 0.604036
Absolute values of t-stats in parentheses
Both models lost one observation to Autocorrelation
Both models were estimated Using a block-diagonal regression
to identify Delaware individual effects on the entire panel
sample.
Table 5
United States Growth Equations-Random Effects
22. Dep. Variable
Annual
Employment
Growth
Annual Growth
in Real Per
Capita Total
State Income
Sample 1970-1998 1970-1998
Variable Coefficients
Constant -0.031401 -0.016977
(2.450976) (1.317531)
National Growth Rate 0.875731 1.01248
(29.65151) (20.39103)
Weighted Average 0.047694 -0.047317
(1.965523) (1.116386)
Financial Depth -0.007858 -0.005493
(2.623557) (1.659874)
1981-Dummy -3.53E-05 -0.001389
(0.027833) (0.67613)
Durbin-Watson 0.941471 1.761695
Adj R2
0.395943 0.415432
Absolute values of t-stats in parentheses
Both models were estimated with a grand regression on the
balanced panel data set
Table 6
United States Growth Equations-Fixed Effects
23. Dep. Variable
Annual
Employment
Growth
Annual Growth
in Real Per
Capita Total
State Income
Sample 1970-1998 1970-1998
Variable Coefficients
Constant -0.03446 -0.086935
(1.648464) (2.114836)
National Growth Rate 0.876588 1.010815
(32.23076) (20.97751)
Weighted Average 0.044913 -0.057603
(1.476188) (1.327172)
Financial Depth -0.008635 -0.02223
(1.754996) (2.167606)
1981-Dummy 6.03E-05 0.002124
(0.034281) (1.064537)
AR(1) 0.523375 0.068309
(5.338028) (0.656738)
Durbin-Watson 0.977917 1.784289
Adj R2
0.501853 0.411402
Absolute values of t-stats in parentheses
Both models lost one observation to Autocorrelation
Both models were estimated with a grand regression on the
balanced panel data set
Table 7
Means and Standard Deviations-Employment Growth
1970-1980 1981-1998
Mean Std. Dev Mean Std. Dev
24. Delaware 0.013166 0.0225 0.024586 0.018179
South Dakota 0.013999 0.01794 0.018985 0.015983
United States 0.020781 0.018434 0.018549 0.012277
Table 8
Means and Standard Deviations-Per Capita Income Growth
1970-1980 1981-1998
Mean Std. Dev Mean Std. Dev
Delaware 0.008024 0.025872 0.017769 0.021437
South Dakota 0.010047 0.132542 0.024012 0.0314
United States 0.014835 0.026672 0.01759 0.016772