Economic growth: 1960’s
Juan Aviles
ECO 202
Milestone One
Professor
10/3/2015
ECO 202
Introduction
• Real Gross Domestic Product and Growth Rate 1960-1969
• Historical events that impacted the U.S economy during this
period.
i. Great Society Initiative
ii. Tax policies review
• Unemployment and Inflation rate during this period
• Interest rates fluctuations thought 1960-1969 and their
impacts
ECO 202
Ten-Year Period of U.S. Economic History
Overview
• Real Historical Gross Domestic Product (GDP) and
Growth Rates of GDP 1960-1969
YEAR
1960
1961
1962
1963
1964
1965
1966
1967
1968
1969
Real
GDP
(Billion
s of
2009
dollars ) 3,108.73,188.1 3,383.1 3,530.4 3,734.0 3,976.7 4,238.9 4,355.2 4,569.0 4,712.5
Real
GDP
Growth
Rate
0.86 6.37
4.28
5.18
5.15
8.48
4.51
2.70
4.97
2.07
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Events that impacted the U.S. economy 1960s
• Reviewing of Tax Policies
• Great Society Initiative
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Unemployment and Inflation Rates
between 1960-1969
YEAR
S
1960
1961
1962
1963
1964
1965
1966
1967
1968
1969
INFLA 1.03
TION
RATES
1.71
0.67
1.33
1.64
0.97
1.92
3.46
3.65
4.40
UNE
5.5
MPLO
YMEN
T
RATES
6.7
5.5
5.7
5.2
4.5
3.8
3.8
3.6
3.5
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Interest Rates Fluctuation During the 1960s
DATES
INTERS T RATES %
AUGUST 23, 1960
4.5
December 6, 1965
5
March 10, 1966
5.75
August 16, 1966
6
January 26, 1967
5.75
November 20, 1967
7.6
April 19, 1968
6.5
December 18, 1968
6.8
January 7, 1969
7
March 17, 1969
7.5
June 9, 1969
8.5
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Conclusions
• Gross domestic product is the broadest pointer of
financial development and advancement
• Genuine GDP dependably consider inflation in this
way, permitting correlation against other chronicled
time periods
ECO 202
Fiscal Policies
Juan Aviles
ECO 202
Milestone Two
Professor
16 OCT 15
ECO 202
Fiscal Policies Adopted by U.S. Government
between 1960-1969
• Adjustments in Business and Personal taxes.
• Government Procurements
• Transfer Payments.
ECO 202
Adjustments in Business and Personal Taxes
• Revenue Act of 1962.
• Revenue Act of 1964.
• Tax Adjustment Act of 1966.
• Revenue and Expenditure Control Act of 1968.
• Tax Reforms Act of 1969.
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Government spending
Examples of Government expenditures:
 National Defense
 discretionary expenditures
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Transfer Payments
For example:
 Social securities
 Welfare benefits
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Conclusions
• Fiscal policies adopted in 1960s had a positive impact on the
U.S. Economy.
• Since 1960, Government spending continually increased over
the decade.
• Transfer payments expenditure rose sharply in absolute terms
as well as percentage of real GDP from 1960.
• During these period the government kept on reviewing tax
policies as it considered tax as the major tool to control the
economic activities.
ECO 202
Monetary Policies
Juan Aviles
ECO 202
Milestone three
Professor
26 OCT 15
ECO 202
Monetary policies
 This presentation examines the Monetary Policy in the 1960s, the most
often utilized monetary policy to reinstate the economy.
 Monetary Policy refers to the process where the Federal Reserve attempt
to control the money supply by use of various tools.
ECO 202
Monetary policy tools
• Instruments that initiate monetary policy.
i.
Open market operations
ii.
Reserve Ratio
iii.
Discount Rates
ECO 202
Open markets operations
• Refers to the procurement or sales of bonds by the Federal Reserve in the
open market.
• Expansionary policies- the fed purchases the bonds.
• Contractionary policies entails selling of the bonds.
• Stimulation and accommodation policy of 1969.
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Discount rates
• Discount rate is the interest rate charged by federal reserve to banks that
borrow or lend from it.
• For Expansionary policies the discount rates are lowered.
• For contractionary policies the discount rates are raised.
ECO 202
Reserve ratio
• Designed to change the least aggregate of reserves the bank ought to hold.
• To take expansionary policies the Fed is forced to reduce the reserve
ratio.
• For contractionary policies the Fed increases the reserve ratio.
ECO 202
References
•
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Bartlett, B. (2012). The Benefit and The Burden: Tax Reforms. Cambridge : Cambridge
University Press.
Boccia, R. (2014, October 17). Eliminating Waste and Controlling Government Spending.
Retrieved October 13, 2015, from The Heritage Foundation:
http://www.heritage.org/research/reports/2014/10/eliminating-waste-and-controllinggovernment-spending
Boyes, W. J., & Melvin, M. (2013). Economics. Australia : Cengage Learning South-Western.
Furchtgott, D. (2013, November 11). Lesson from John F Kennedy on Tax. Retrieved
September 29, 2015, from Economics21: http://www.economics21.org/commentary/6lessons-jfk-tax-policy
Higgs, R. (2011, February 1). The Economics of the Great Society . Retrieved September 28,
2015, from The Independent Institute: http://www.independent.org/issues/article.asp?id=3157
Interest Rates History. (2008, December 16). Retrieved September 29, 2015, from Fed Prime
Rates: http://www.fedprimerate.com/wall_street_journal_prime_rate_history.htm
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References
•
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•
•
•
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Madura, J. (2014). International financial management. Australia: South-Western.
M.A.Akhtar. (1997). Understanding Open Market Operations. Economics Journal , 25-47.
McEachern, W. A. (2014). Macroeconomics : a contemporary introduction. Mason, OH:
South-Western Cengage Learning.
Meulendyke, A. M. (1998, May 25). U.S. Monetary Policy & Financial Markets. Retrieved
October 24, 2015, from St. Louis Fed Research Organization:
https://research.stlouisfed.org/aggreg/meulendyke.pdf
Musgrave, R. A. (2004). U.S. Fiscal Policy, Keynes and Keynesian Economics. Cambridge:
Cambridge University Publishers.
Tax Legislation 1960-1969. (2014, September 12). Retrieved October 13, 2015, from Tax
Policy Centre: http://www.taxpolicycenter.org/legislation/1960.cfm
The Discount Rate. (2014, December 12). Retrieved October 24, 2015, from Federal Reserve
Bank: http://www.federalreserve.gov/monetarypolicy/discountrate.htm
Timberlake, R. H. (2013, June 3). The Concise Encyclopedia. Retrieved October 24, 2015,
from Federal Reserve System:
http://www.econlib.org/library/Enc/FederalReserveSystem.html
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References
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•
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U.S Department of Commerce. (2014, September 29). BEA National Economic Accounts.
Retrieved September 28, 2015, from Bureau of Economic Analysis:
http://www.bea.gov/national/index.htm#gdp
United State Department of Labor. (2014, June 14). Bureau of Labor Statistics Data.
Retrieved October 29, 2015, from BLS : http://data.bls.gov/pdq/SurveyOutputServlet
Wessels, W. J. (2011). Business and Economics. Hauppauge, NY: Barron's.
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