US IN LATE 1990S

Economic Growth of US in Late 1990s

Economic Growth of US in Late 1990s

Introduction

With a gross domestic product (GDP) of 9837 billion in 2000, the U.S. became the largest economy of world. GDP per capita (34,940 dollars), high (4th in the world in 2000), ranked US among the richest countries of the world. However, over 13 percent 100 of the population reached the poverty line in 1997. In 1999, the U.S. had approximately 144.9 million in assets (Wolff, 2001, 315). The unemployment rate (5.8 p. 100 in 2002 and 4.3 percent. 100 in 1998, the lowest rate since 1970) is relatively low compared to Europe. The purpose of this paper is to investigate economic growth of United States in late 1990s.

U.S. industry

American industry is different priority high technology, creating products based on advanced technologies. Investment in manufacturing has become one of the engines of economic growth in the U.S. in the late1990s. Investments correspond to about 11% of GDP. Over half of all investments in the industry account for the purchase of computers and computer science. On the basis of advanced technologies in the production process has been a significant reduction in costs has been an increase in labor productivity (Wade, 1998, 78). The highest income (profit growth in the late1990s - 70%) yield electronic and electrical industry.

Mining operations in 1996 amounted to U.S.

Name

Number

Iron ore

39.342 million tons

Copper

1.91 million tonnes

Zinc

620 000 tonnes

Lead

430 000 tonnes

Molybdenum

57 000 tonnes

Vanadium

2700 tons

Mercury

550 tons

Silver

1.8 million pounds

Gold

325,000 pounds

In 1995 the U.S. manufactured goods

Name

Number

Motor vehicles and motorcycles

238,384 units

Planes and helicopters

104,854 units

Food

94 072 units

Machinery and equipment

79 439 units

Electronic Components

73 642 units

Of drugs

67 792 units

Computer and office equipment

66 708 units

Medical equipment

39 535 units

Cigarettes

29 745 units

Aerospace

29 508 units

Photographic equipment

22 119 units

Ships, yachts and boats

15 249 units

Children's and sports goods

12 123 units

Audio and video products

10 614 units

Saving and investment

In comparison with Western Europe and Japan, the U.S. has a rather low level of savings, investments (15.4% of GDP, while in the Netherlands 19.5%, Germany 22.6%, Japan 29.7%). Fighting inflation has led to a reduction in interest rates and the population of interest in savings. Americans prefer free money put into circulation in the financial markets by buying securities. This replenishment of the financial market stimulates excessive growth of speculation on it. From 1998 to 1999 in the United States experienced significant growth in personal wealth, which was associated with the boom in the stock market (Keynes, 2004, 115). Total annual number of billionaires in the country increased from 79 to 268, and many states are associated with virtualization market securities. A second explanation for the low level of savings is the consumer attitude towards life of Americans. They prefer to spend money buying new things, getting education, traveling. On the one hand the U.S. economy suffers a weakening of its internal investment capacity, which makes contact to the external investment resources. On the other hand the U.S. economy is at the innovation stage of development: reducing the share of investment in GDP is compensated by the creation of new technologies that promote the ...