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https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis


https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis

...

THE LEGACY OF THE 1980s


https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis

Index, 1987=100
120

Trillions of 1982 dollars
5
4

80

3
2

40

1
0

0
1948

~.L-.&...i.llaJ..L.....-.L....a-L.IL...L..L.JL...L..L.J.__.__.~

1948

'54

'60

'66

'72

'78

'84

'90

Millions
120

'54

'60

'66

'72

'78

'84

'90

'72

'78

'84

'90

Percent change from year ago
16
12

90

8

4

60

0
30
1948


https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis

-4

' - - - L . . I . . L l a J . . L . ~ . - - . & . .................................-..&..1-

'54

'60

'66

'72

'78

'84

'90

1948

'54

'60

'66

Index, 198204=100
130

U.S.

10

New England

120

Millions of units
12

8
6

110

4
100
2
0

90
1983 '84

'85

'86

'87

'88

'89

1982

'90

'84

Index, 198204=100
200

Billions of 1987 dollars
500

180

400

'86

'88

'90

Public

160

300

140
120

100

100
80


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Federal Reserve Bank of St. Louis

rivate
esidential

200

1983 ~4

~5

~6

'87

'88

~9

~o

0
1982

'84

'86

'88

'90

Percent of GNP
8

Billions of dollars
200

0

4

-200
0
-400
-4

-600

-8
1948

'54

'60

'66

'72

'78

'84

'90

1978

18

::
40
1971

'80

'82

Percent of disposable income
20

Percent
100


https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis

-800

'74

'77

'80

'83

'86

'89

'84

'86

'88

,~r

.:~~

10 f 't t t t t t t t t I I I I I I It I It I I I I I It I I I I I
1959
'65
'71
'77
'83
'89

7

.

.

4!1-I~;l{,~~9~;,;;.~~,~ng,,~ !. ~Jl?l!l~!lf;~lll~,~.iji,lt~~tN~lmIJ),,,~~;:~~.~i<;,~~~$::+,.


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Federal Reserve Bank of St. Louis

Percent of GNP
4

Gross domestic purchases as a percent of GNP

104
102
100
98

-2

96
1972

'75

'78

'81

'84

'87

1972

'90

'75

'78

'81

'84

'87

'80

'83

'86

'90

Percent of GNP

Percent of total debt outstanding
8

11
9
7
5

1972

'75

'78

'81

'84

'87

'90

3
1971

'74

'77

'89

g

Index, March 1973=100
175
150
125
100

-4

75
1984

'85

'86

'87

Billions of dollars, annual rate
200
100
0 ... ..........:·=,.:.: .. :..

'88

'89

Foreign
capital inflow

1986

'90

~-

: • ❖ ;:(❖:-:y<,•;,;,•,g:-· Jf:~O~l,i__,_:·

'88

'89

'90

Billions of dollars, annual rate
150

.e-11-=~·=::t

-~~~:~·

'87

·=:\%=,b

120
90

---

60

Current account
balance

-100
-200
1960


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Federal Reserve Bank of St. Louis

'66

'72

'78

'84

'90H1

'66

'72

'78

'84

'90H1


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Federal Reserve Bank of St. Louis

q

Percent of real GNP

Percent of real GNP
8

75

6

50

4
25
2

0

1950s

1960s

1970s

1980s

0

1950s

1960s

1970s

1980s

JD

1990: A YEAR OF TRANSITION


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Federal Reserve Bank of St. Louis

Billions of dollars, annual rate

Percent of disposable income

300

20

Debt instruments

-200


https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis

1976 '78

'80

'82

'84

'86

'88 '90H1

12

1976 '78

'80

'82

'84

'86

'88

'90

1990 -- international adjustment proceeding
Real net exports and trade weighted dollar

Imports and exports of goods and services

billions of 1982 dollars

billions of 1982 dollars

index, March 1973=100

(V')To-----------------,-175

II

Tracie-weighted dollar

.-.
.,. '.

(right scale)
150

125
-100

Net exports
(left scale)

........

Imports

.,,
II

.,,

•
, ....•'
.
.,··.,

..-·····-·-··
••
.
.•,.•

••~••

II
..
~

#

-200830.a..-..1--840-1--850-1-860...--1-87__
0__
1 _880
.........
1_8_90_1___,900....._,1_~ 75

1

8401

8501

8601

8701

Average U.S. productivity growth

Merchandise trade balance

percent annual rate

billions of dollars


https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis

.,······-..

8801

8901

9001

.. ...,
......
..,
····-·
.

excluding imported
•.., • • ~ petroleum products

-100

Total

-200 75 76 77 78 79 80 81

"1990: average of first 3 quarters

82 83 84 85 86 87 88 89 90•


https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis

Billions of dollars

Percent of GNP

250

25

200
150
100
50
0

1970

'74

'78

'82

'86

'90

16

1970

'74

Billions of dollars

Billions of dollars

160

400

~ ~~~'ciions

120

;e~

80
40
0

1991

1992

1993

1994

Fiscal year

1995

'78

'82

'86

'90

Fiscal year

Fiscal year

300

Sep.'90
baseline

200

1

f

After budget
package

100
Revenue
increases

0

-100

1989

'90

•oMB estimates.

'91 *

'92*

Fiscal year

'93*

'94*

'95*

THE 1990 AND 1991 OUTLOOK


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Federal Reserve Bank of St. Louis


https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis

index, 1966=100
100

index, 1982=100
155

90
145

:~."::#%

~ ~,.1~«~~¾.~~ff'\
~

~

~ :,»
~ - , /·

135

•:

/

.

/

,

80
70

.

$

125

1986

60
'87

'88

'89

'90

1986

'87

'88

'89

'90

'89

'90

Index
3,000

percent
70
60

2,500
50
2,000
40
1,500

30
1986

'87

'88

'89

'90

1986

'87

'88

index, 1987=100
115

Millions
115

110

110

105
105
100
100

95

95 ________________...._____________
90
1986

'87

'88

'89

1986

'90

'87

'88

'89

'90

Millions of units
12

Billions of 1982 dollars
500

10
450
6
400


https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis

~

_ _...___ _,___ _,___ _____.....__ ___.
1986

'87

'88

'89

'90

4 ....____.....___________.______.____

....,J

1986

'87

'88

'89

'90

Real activity relatively well balanced
Consumer spending

Foreign trade contribution to GNP

trillions of 1982 dollars

billions of 1982 dollars

3--------------------

50-r---------------------

Goods

Services

1986

1987

• First 3 quarters of 1990 st an annual rate.

• First 3 quarters of 1990 st an annual rate.

Business fixed investment

Inventory to sales ratio

billions of 1982 doHsrs

ratio

Structures

Equipment

1986

1987

1988

• First 3 quarters of 1990 st an annual rate.


https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis

1989

1990•

1988

1989

1990•

/)
I

Percent change
6

4

Percent change, annual rate
3
2
1
0

v~

,I

1'
2

I

-1
-2

0

-3
1990


https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis

1991

1986

1987

1988

1989

1990

1991


https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis

Percent change
6

4

2

0

1986

1987

1988

1989

1990

1991

THE MONETARY POLICY CHALLENGES


https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis

..

Percent change from year ago

Percent change from year ago

16

16

12

12

8

8

4

4


https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis

0

1970

'74

'78

'82

'86

'90

0

1970

'74

'78

'82

'86

'90

WW@

wJl

_£,~

1990 -- some monetary policy considerations
Growth and inflation

Total debt and depository credit extended

percent change from year ago

percent change, annual rate

... .......
.•.
•..
••
....

••

Depository
credh

Oil prices*

Interest rates

dollars per barrel

percent

, ..

.
,.

..•

:,.~
•••

:.

•, I

'· :\ ! ..
t

-·

I

I


https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis

~••• .'

.,

•
_,•

••

Federal
funds

•. i ~·
87

• West Texas intermecftate crude.

•

.

•• •••

88

89

90

.••
•.
•

~
'•

.

/4;/Z,LJ

._tr
Trillions of 1982 dollars
5

4

1969-90
trend
Average trend growth

3

Percent, annual rate
4

2

3

2

1

0

0

1947-90


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Federal Reserve Bank of St. Louis

1947-68 1969-90

1948

'54

'60

'66

'72

'78

'84

'90