Econ HW 8- w/answers

4 percent from 1982 to 1989 while it was 19 percent

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Unformatted text preview: was 2.4 percent from 1982 to 1989, while it was 1.9 percent from 1972 to 1982). This growth could be the result of supply -side incentives, although many studies question this conclusion. The employment growth also may have occurred in the absence of tax cuts, because of the demographic effects associated with the baby boom generation ent ering the work force in large numbers, as well as greater labor force participation among women. Supply-side economics predicted higher saving, but in fact saving rates fell dramatically during the 1980s (probably in part because individuals consumed their tax cuts rather than saving them). Theref ore, critics have argued that the growth in the 1980s was more demand-led (Keynesian) than supply led (classical). Finally, the tax rate cuts of the early 1980s were partially reversed in the George Bush (senior) administration and the early part of the Clinton administration. Nevertheless, the U.S. economy experienced very good macro performance from the middle of 1992 through the rest of the...
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This document was uploaded on 02/26/2014 for the course ECON 100 at DePauw.

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