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November 1989, Vol. 112, No. 11
The aggregate structure of the economy
Norman C. Saunders
In a previous issue of the Monthly Labor Review, the Bureau of Labor Statistics published projections of the U. S. economy to the year 2000.1 In this article, three alternatives which replace the earlier projections are examined: moderate-, low-, and high-growth projections. These alternatives are designed to provide a range of potential output and employment growth patterns during the 1990's, a range encompassing different assumptions about those items which affect future employment growth and which are difficult to project with any certainty.
The moderate-growth projection encompasses an economy which shows a more moderate rate of gross national product (GNP) growth in the coming decade than that for the previous 12 years. This slowing is due primarily to a slowing of labor force growth in an economy that is expected to continue reducing the Federal budget and foreign trade deficits. By way of comparison, the high-growth projection exhibits marked improvements in output growth during the period 1988 to 2000 as compared with the earlier period, due to higher population growth, less slowing in labor force growth, and a much higher rate of growth of labor productivity. Finally, the low-growth economy is characterized by much higher unemployment rates, higher inflation, continually increasing deficits in both Federal and foreign trade, much lower growth in productivity, and deeper swings in the business cycle. Projected rates of growth in real GNP for the period 1988-2000 range from 1.8 percent annually in the low-trend projection to 3.2 percent each year in the high-trend projection.
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1 September 1987; the series of five articles was titled "Projections 2000."
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