ECON-002 Lecture Notes - Lecture 25: Potential Output, Factors Of Production, Aggregate Demand
Document Summary
Pull out of nafta (north american free trade agreement) Negation involving looking at labor standards, agreements on the environment; there are things we should probably bring back to the table. Economists debate how successful [the reagan and bush tax cuts] were in stimulating the economy, but nearly all agree that the cuts ultimately added to the debt as they failed to pay for themselves . Corporations will only owe taxes on incomes generated on the us mainland, not on other countries; there is concern that this will not stimulate profits on the us. 1973-75 recession: you never run out of things that can go wrong. This era set a catalog for things that can go wrong. Things that went wrong: estimates of the gdp gap were completely wrong; in reality, potential gdp was a lot smaller than we thought. There was an overly-pessimistic assessment of the gap that led to excessive expansion of ad (aggregate demand)