1) Statement from CEA Chair Cecilia Rouse on the Economic Report of the President
https://www.whitehouse.gov/briefing-room/statements-releases/2023/03/20/statement-from-cea-chair-cecilia-rouse-on-the-economic-report-of-the-president/
2) 2023 Economic Report of the President
https://www.govinfo.gov/app/collection/erp/2023
Contents
Chapter 1: Pursuing Growth-Enhancing Policies in Today’s Changing World ........................................... 21
Investing in Production Drives Economic Growth ............. 23
The United States’ Economic Growth Over Time.............. 25
The Inputs to U.S. Economic Growth Over Time ........... 29
U.S. Economic Growth in Context ...................... 34
Sustaining Economic Growth in Today’s Changing World....... 35
Investing in Human Capital and the Labor Supply: Implications of More Women Participating in the Labor Force ........... 35
Investing in Physical Capital: Adapting to the Increasing Effects of Climate Change............................. 41
Investing in the Economy’s Productivity: The New World of Digital Markets ..................................... 44
Conclusion ............................................ 48
Chapter 2: The Year in Review and the Years Ahead ............... 51
The Year in Review: The Continuing Recovery ............... 53
Output in 2022: A Return to Near Its Trend ............... 54
The Historic Strength of Labor Markets in 2022 ........... 59
The Cooling of Financial Markets in 2022................ 61
Inflation in 2022........................................ 62
Factors That Had an Impact on Inflation in 2021–22 ....... 67
The Forecast for the Years Ahead .......................... 84
The Near Term ..................................... 85
The Long Term ..................................... 87
Conclusion ............................................ 91
Chapter 3: Confronting New Global Challenges with Strong International Economic Partnerships ........................... 93
The United States’ International Trade and Investment in 2022 ... 94
Pandemic-Related and Macroeconomic Trends Have Shaped Record Goods Imports ......................... 98
Geopolitical Shocks and Global Demand Have Shaped Record Goods Exports............................... 101
International Trade in Services and Digital Trade Have Been Resilient ..................................... 103
Continued Growth for Foreign Direct Investment Despite Elevated Uncertainty ............................... 106
Global Economic Relations Are at a Turning Point ........... 110
Imperatives of Economic Partnerships in the Changing Global Environment ................................ 112
Resilience during Global Supply Shocks................. 113
Responding to Geopolitical Challenges ................. 117
Promoting Opportunity and Managing Risks in Digital Trade 119
Conclusion ........................................... 122
Chapter 4: Investing in Young Children’s Care and Education ...... 125
The Effectiveness of Early Childhood Investments ........... 126
Benefits for Children and Society ...................... 126
Defining Quality in ECE ............................. 128
Benefits for Working Parents.......................... 129
Challenges in the Market for Early Care and Education........ 133
Workforce Challenges ............................... 134
The High Costs of High-Quality Care .................. 136
ECE Pricing and Price-Sensitive Consumers............. 140
Business Model Fragility............................. 141
Participation in and Availability of ECE ................ 142
The Role of Subsidies in the Market for Care ............... 146
International Comparisons ........................... 146
Subsidies in the United States’ ECE Market.............. 147
Conclusion ........................................... 150
Chapter 5: Building Stronger Postsecondary Institutions........... 153
The U.S. Postsecondary Institutional Landscape.............. 155
Institutions Serve a Diverse Student Population........... 156
Institutions Vary in Their Prices and Spending on Students. . 157
Institutions Vary in Their Student Outcomes.............. 158
Institutions Matter for Student Outcomes................ 160
The Rationale for and Delivery of Public Postsecondary Investment ........................................... 162
The Economic Rationale for Public Sector Investment ..... 163
How Public Funds Are Delivered: Student Aid and Institutional Support ................................ 164
The Imperfect Market for Postsecondary Institutions.......... 169
Geographic Constraints ............................. 170
Informational and Behavioral Constraints............... 170
College Expansion Constraints........................ 171
Institution-Focused Policies That Promote Access to Postsecondary Value ................................... 173
Supporting the Quality of Existing Colleges and Programs. . 173
Institutional Accountability ........................... 175
Addressing Geographic Barriers to Access .............. 178
Conclusion ........................................... 181
Chapter 6: Supply Challenges in U.S. Labor Markets ............. 183
Labor Supply Fundamentals ............................. 184
Trends in U.S. Labor Market Participation .............. 185
Why Worry About Slower Labor Supply Growth? ......... 186
Causes of U.S. Labor Supply Challenges ................... 189
Demographic Trends................................ 189
Declining Labor Market Participation Among Men........ 191
Female Labor Force Participation: The United States Falls Behind ...................................... 197
The COVID-19 Pandemic’s Lingering Effects on the Labor Supply ...................................... 199
Options to Boost the U.S. Labor Supply .................... 201
Increasing Immigration ............................. 201
Drawing More Adults into the Labor Market ............ 204
Conclusion ........................................... 209
Chapter 7: Competition in the Digital Economy: New Technologies, Old Economics ........................................... 211
The Benefits of Digital Markets .......................... 213
Reducing Search Costs .............................. 213
Increased Variety .................................. 214
“Free” Products and Services ........................ 215
How Is Competition Different in Digital Markets?............ 217
Big Data ......................................... 218
Network Effects .................................... 220
Multi-Homing ..................................... 223
When Do Markets Tip? .............................. 223
The Role of Law and Regulation in the Digital Market ........ 225
Network Effects Create a Competitive Moat.............. 227
The Challenge of Preserving Competition in
Digital Markets .................................... 228
Preventing the Extension of Dominance into
Adjacent Markets................................... 229
Preventing the Misuse of Consumer Data ............... 230
Monitoring Pricing Algorithms and Collusion ............ 232
Conclusion ........................................... 235
Chapter 8: Digital Assets: Relearning Economic Principles......... 237
The Perceived Appeal of Crypto Assets .................... 239
Claim: Crypto Assets Could Be Investment Vehicles ....... 244
Claim: Cryptocurrencies Could Offer Money-like Functions without Relying on a Single Authority .................. 244
Claim: Crypto Assets Could Enable Fast Digital Payments . 244
Claim: Crypto Assets Could Increase Financial Inclusion . . 245
Claim: Crypto Assets Could Improve the United States’ Current Financial Technology Infrastructure ............. 246
The Reality of Crypto Assets............................. 246
Crypto Assets Are Mostly Speculative Investment Vehicles . . 246
Cryptocurrencies Generally Do Not Perform All the Functions of Money as Effectively as Sovereign Money, such as the U.S. Dollar ............................. 251
Stablecoins Can Be Subject to Run Risk ................. 255
Crypto Assets Can Be Harmful to Consumers and Investors. . 256
There Have Been Limited Economic Benefits from DLT Technology ....................................... 258
The Risks of Financial Innovation ..................... 263
Other Risks from Crypto Assets........................ 264
Investing in the Nation’s Digital Financial Infrastructure ....... 268
The FedNow Instant Payment System................... 268
Central Bank Digital Currencies ...................... 270
Conclusion ........................................... 272
Chapter 9: Opportunities for Better Managing Weather Risk in the Changing Climate ...................................... 273
Economic Principles of Adaptation Policy and Planning ....... 277
The Economic Costs and Financial Risks of Climate Change in the United States .................................... 280
The Costs of Climate Change for the United States’ Well-Being and Prosperity............................ 280
Climate Change and Financial Stability................. 284
The Federal Fiscal Implications of Physical Climate Risk ...... 288
Risk Assumption.................................... 289
Climate-Exposed Assets.............................. 289
The Provision of National Public Goods ................ 291
The Programs of the Social Safety Net .................. 291
Market Failures and Distortions That Slow Adaptive Adjustments and Policy Responses................................... 292
Imperfect Information on Physical Climate Risks ......... 293
Information Asymmetries............................. 293
Externalities and Public Goods........................ 294
Credit Constraints.................................. 295
Moral Hazard ..................................... 296
Four Potential Pillars of the Federal Adaptation Strategy and Major Policy Opportunities.................................... 297
Producing and Disseminating Knowledge about Climate Risk 297
Long-Term Planning for the Climate Transition........... 298
Ensuring the Accurate Pricing of Climate Risk ........... 300
Protecting the Vulnerable ............................ 301
Conclusion ........................................... 302
