THE MACROECONOMIC IMPACT
OF FEDERAL POLLUTION CONTROL PROGRAMS
1981 ASSESSMENT
SUBMITTED TO THE ENVIROMENTAL PROTECTION AGENCY
DATA RESOURCES, INC.
JULY 17, 1981
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TABLE OF CONTENTS
PAGE
INTRODUCTION 1
PRINCIPAL CONCLUSIONS 2
POLLUTION CONTROL COSTS 5
THE UNDERLYING ECONOMIC PATH 6
DIRECT CHANGES 7
ECONOMIC IMPACTS-FURTHER DISCUSSION: 9
PRICES 9
BUSINESS FIXED INVESTMENT 10
INTEREST RATES 11
HOUSING 11
CONSUMER SPENDING 11
GOVERNMENT 12
FOREIGN TRADE 12
CONCLUSION 13
SENSITIVITY ANALYSIS 14
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INTRODUCTION
This study presents an analysis of the macroeconomic impacts of federal air and
water pollution control regulations on the United States economy. The study
does not include the value of improvements in the quality of life which are not
priced by the market system. The analysis uses Environmental Protection Agency
(EPA) estimates of the incremental costs of federal pollution control regulations
for the period 1970-1987. For each industry, estimates were made for the capital
investment, annualized capital costs, and operating and maintenance costs by
industry. Estimates were also made of the costs of state and local governments'
pollution control activities, and the cost to consumers and business of mobile
source regulations. The estimates reflect only the "incremental" costs, i.e. the
additional costs incurred solely as a result of federal regulations. Those additional
costs which would have been undertaken in the absence of federal regulations
are included in the macroeconomic "without" scenario (described below).
The analysis used the Data Resources, Inc. (DRI) macroeconomic model of the
U.S. economy and covered the period 1970-1987. The analysis compared what
economic conditions would have been without the costs of federal regulations
to what economic conditions would have been with the costs of federal regulations.
A baseline simulation, representing the performance of the economy under current
EPA regulations, was constructed using the actual data for 1970-1980 and the
TRENDLONG02S1 forecast for 1981-1987. This baseline simulation is called
the "with" pollution control costs scenario. Appropriate adjustments were made
to the "with" simulation to remove the incremental costs of federal pollution
control. This simulation is called the "without" pollution control costs simulation.
A comparison of the "with" and "without" simulations gives an assessment of
the direct and indirect macroeconomic effects of federally induced pollution
control costs on economic performance. Because the loss of benefits which results
from removing regulations is not considered in this study, the. results presented"
here cannot be taken as indicative of what would actually happen if regulations
were to be removed.
This study updates a previous DRI study, "The Macroeconomic Impact of Federal
Pollution Control Programs-1979 Assessment."
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To supplement this "base-case" analysis, three other simulations were performed.
The first additional simulation analyzed the macroeconomic effects of possible
government efforts to offset the effects of federal incremental costs of pollution
control by pursuing a non-accommodating monetary policy. The second and third
simulations analyzed the effects of incremental costs being either higher or considerably
lower respectively than estimated in the original "with" case.
PRINCIPAL CONCLUSIONS
The incremental costs from Federal pollution control regulations have had four
major effects.
1. Price increases are moderately higher. The costs per unit of output are
raised by the federal regulations and these higher costs are eventually translated
into higher prices. For example, the average annual rate of increase in
the consumer price index (CPI-U) is 0.* percentage points higher over the
period 1970-1987 than would be the case in the absence of environmental
regulations. The average annual rates of increase in the Producer Price
Index (PPI) and GNP deflator are 0.5 and 0.* percentage points higher, respectively,
over the same period.
2. Until 1977, the real level of economic activity, as measured by gross national
product, is stimulated by the incremental investment required under federal
regulations and the additional activity generated by industries producing
pollution control plant and equipment. In 1972, real GNP increases $9.2
billion or 0.5%. After 1979, the real level of economic activity declines
as the higher price level reduces aggregate real output. Over the period
1970-1987, the average annual rate of growth of real GNP is reduced by
2
0.1 percentage point. Real GNP in 1987 is $21.8 billion or 0.7% lower.
3. Employment is stimulated throughout the 1970-1987 period. Jobs are created
in the pollution control equipment industry and in all industries to operate
and maintain pollution equipment and facilities. The unemployment rate
is on average 0.3 percentage points lower over the period. By 1987, there
is a net increase of 524,000 additional jobs as a result of pollution controls.
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4. Real business fixed investment is stimulated by the incremental investment
mandated under federal regulation and by the additional activity generated
by industries producing pollution control plant and equipment. In 1973, real
business fixed investment is up $6.0 billion or 2.6%. Eventually, the combined
effects of higher prices, increased interest costs, and reduced aggregate
demand dampen investment spending. By 1987, real business fixed investment
is only $0.9 billion or 0.3% higher.
IMPACT ON PRICES
In reducing pollution, the incremental costs from Federal regulation impose higher
costs on firms and are passed through as higher product prices. The higher costs
stem from two sources: first, labor and materials costs per unit of output are
raised, as the additional labor and material inputs needed to operate and maintain
pollution control equipment generate no additional output in a form measurable
by the national income accounts. Second, the investment needed to produce
a given level of output is raised, as the incremental investment costs produce
no additional "measured" output. By 1987, the GNP deflator is 7.496 higher, raising
its average annual rate of increase by 0.4 percentage point per year. Consumer
prices, as measured by the consumer price index, are 6.6% higher, raising their
average annual rate of increase 0.4 percentage point per year. Wholesale prices,
as measured by the PPI, are 9.0% higher, raising their average annual rate of
increase 0.5 percentage point.
The effect on prices rises over time, as the incremental costs of federal regulations
rise rapidly. From 1980 to 1987, real incremental costs from federal regulations
rise 48%, while real GNP in the "with" case rises 21%.
2
Unless otherwise noted, all figures in real terms are expressed in constant 1979
dollars. All price indexes are based as 1979=1.
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IMPACT ON REAL OUTPUT
The impact on real output-varies over time. Initially, the incremental costs from
federal regulations stimulate the economy. Increased operating and maintenance
'costs require extra workers and materials, and increased costs for pollution control
plant and equipment represent increased demands on the industries that build
them. Eventually, given the assumptions that profit margins are not reduced,
firms pass on the full amount of higher costs into higher product prices, which
dampen aggregate demand and counteract the initial stimulus.
Until 1980, real GNP is higher in the "with" case. The positive gap peaks in 1972,
with real GNP up $9.2 billion or 0.5%. During the 1973 boom period and the subsequent
downturn, this positive gap narrows significantly. Higher prices due to incremental
costs reduce consumption spending and exports and raise imports. Incremental
costs drive up unit costs of output, reducing productivity and aggregate supply.
This drag on economic growth caused by pollution control costs is magnified over
time. By 1987, real GNP is $21.8 billion or 0.7% lower.
IMPACT ON EMPLOYMENT AND PRODUCTIVITY
The incremental costs from federal pollution control regulations stimulate employment.
Production, installation, and maintenance of pollution control plant and equipment
creates jobs. However, this additional labor input does not generate additional
measured output. In addition, productive capital per worker is lower, as the capital
stock is diluted with the portion of capital required to control pollution. / s a
result, productivity growth declines on an average annual basis of 0.1 percentage
point, as more resources are needed to produce the same amount of output. However,
the employment required to comply with EPA's regulations is estimated to make
the unemployment rate is 0.3 percentage point lower in the "with" case. .By 1987,
there are 52^,000 additional jobs as a result of pollution control requirements.
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BUSINESS FIXED INVESTMENT
Initially, incremental costs from federal pollution control regulations stimulate
real business fixed investment. Firms require additional pollution control plant
and equipment to meet federal standards. This boosts not only their own investment
but also investment by firms that produce the pollution control plant and equipment.
The stimulative effect peaks in 1973, with real business fixed investment up $6.0
billion, or 2.6% above what it would have been without federally required pollution
controls. The stimulative effect tapers off as higher prices drive up interest
rates and reduce aggregate demand. By 1987, real business fixed investment
is $0.9 billion or 0.3% higher.
Investment for pollution control plant and equipment tends to reduce other kinds
of investment, including housing. The degree of reduction varies with economic
conditions and increases as the economy approaches full employment. At full
employment, mandated investment is assumed to replace other investment on
a dollar-for-dollar basis. While total investment is higher, real "productive" business
fixed investment (defined as total real business fixed investment minus real business
fixed investment for pollution control) is lower in the "with" case. By 1987, real
productive business fixed investment is $13.9 billion or 4.0% lower.
HOUSING
s1
The slowdown in aggregate demand and incomes, combined with higher interest
rates, reduces housing starts. The reduction, as measured by the differential
between the two simulations, exhibits a very mild cyclical pattern. By 1987,
housing starts are 115,000 units or 5.2% below the "without" case.
ESTIMATES OF INCREMENTAL POLLUTION CONTROL COSTS"
The estimates of incremental pollution control costs from federal regulations
were made by the EPA. The historical estimates are consistent with estimates
The critical assumptions of the basic analysis are described below, in the section
entitled, "The Underlying Economic Path-The "With" Scenario."
5
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collected and developed by the Census Bureau of the Department of Commerce.
Incremental pollution control costs include only those costs as a result of federal
air and water control requirements. They were broken down by 18 categories:
16 industrial categories, state and local municipal wastewater treatment facilities,
and mobile source emissions.
The estimates were further broken down into incremental operating and maintenance
costs, and incremental investment costs. Incremental operating and maintenance
costs are the labor and material costs associated with operation and maintenance
of pollution control plant and equipment. Incremental investment costs are the
purchases of pollution control plant and equipment.
The EPA estimates of incremental costs are given in Tables 1 and 2. Total incremental
costs rise from $6.4 billion (1979 dollars) in 1970 to $44.8 billion in 1987, an increase
of 12.1% per year. Incremental operating and maintenance costs rise from $3.0
billion in 1970 to $24.8 billion in 1987, an increase of 13.2% per year. Incremental
investment rises from $3.4 billion in 1970 to $20.0 billion in 1987, an increase
of 11.0% per year. As a percent of total plant and equipment investment (in
current dollars), incremental investment rises from 1.5% in 1970 to a peak of
3.9% in 1984 and falls to 3.4% in 1987.
THE UNDERLYING ECONOMIC PATH—THE "WITH" SCENARIO
The impact of pollution control costs depends upon the underlying state of the
economy. The analysis covers the period 1970-1987, which contains many variations
in the pace of economic activity and rate of inflation. The historical period (1970-
1980) begins with the 1970 recession, in which real GNP dropped by 0.2%. The
recovery began in late 1970. By 1973, the economy was booming and was operating
at or near full employment. The recovery came to a halt due to a variety of
factors—quadrupling of crude oil prices by OPEC, large increases in farm prices
due to poor harvests worldwide, inflationary pressures emanating from the strong
growth in the U.S. and elsewhere, the abandonment of wage and price controls,
and a slowdown in monetary growth by th- Federal Reserve, designed to reduce
inflation. The economy began to recover in late 1975, and the recovery lasted
until early 1980. Economic growth plunged in mid-1980 but recovered quickly
in the latter half of the year. However, the rate of inflation remained very high
by post-war standards.
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The forecast period 1981-1987 is consistent with DRI's long-term trend simulation
TRENDLONG0281. The recovery begun in 1980 continues, but is weak by historical
standards. Continual increases in real oil prices, low growth in the labor force
due to demographic factors, a monetary stance which remains tough on inflation,
and general uncertainty about the economy contribute to slow growth. The forecast
of a near full-employment economy in 1987 serves to maximize the effect of
pollution controls on the price level. The rate of inflation unwinds slightly as
the economy is assumed not to suffer from external price shocks i.e., abrupt
changes in food and fuel prices are not projected to occur. Both the historical
and forecast periods incorporate the full costs of pollution control. As such,
they define the "with" scenario.
The major assumptions in the basic analysis that define the "with" scenario in
the period 1981-1987 are:
Energy Prices—prices of foreign crude oil will increase about 3% per year
in real terms relative to wholesale prices.
Monetary Policy—the money supply (M1B) will increase about 6% per year.
Tax Policy—legislation will be enacted that results in a one-time reduction
of 40% in effective asset lifetimes; the Kemp-Roth proposal to reduce personal
income tax rates will be phased in during the 1981-85 period.
Federal Spending—federal spending will be very tight, increasing only about
2% per year in real terms.
Demographics—there will be slowing in the rate of increase in the labor
»>•
force, due to the maturation of the baby boom.
DIRECT CHANGES TO REMOVE INCREMENTAL POLLUTION
CONTROL COSTS—THE "WITHOUT11 SCENARIO
A number of changes were made to the "with" scenario to remove the incremental
costs of federal pollution control regulation (thereby defining the "without" scenario).
A brief list of these changes is given below. A more detailed explanation of
these changes is given in the technical appendix.
These adjustments take no account of the loss of benefits which would occur
if the regulations were removed.
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I. Plant and equipment investment by industry was decreased by the amount
of the incremental investment costs estimated by EPA.
2. The cost of new investment was lowered as firms now need to invest less
to produce a given amount of output.
3. Since many pollution control investments can be financed less expensively
in municipal bond markets, financing costs were raised slightly.
^. Prices by industry were reduced to reflect decreased production costs, as
less labor and material are needed to produce a given level of output. These
reduced costs were passed through into lower product prices according to
a simple model of industrial price determination constructed for this study.
5. Employment was reduced since the workers required to produce, install and
maintain pollution control plant and equipment would no longer be needed.
6. As the federal government makes grants-in-aid to state and local governments
to construct municipal waste water pollution control facilities, grants-in-
aid were reduced by amounts estimated by the EPA.
7. Prices of new motor vehicles were reduced to incorporate the reduced costs
of emission control devices.
8. Investment by firms to.purchase new vehicles was reduced to reflect the
reduced costs of emission control devices.
9. Consumer expenditures for vehicle maintenance were reduced to incorporate
the lower costs for maintaining emission control devices.
10. Consumer expenditures for gasoline were reduced as vehicles would achieve
higher mileage without emission control devices.
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ECONOMIC IMPACTS—FURTHER DISCUSSION
The economic impacts of incremental pollution control costs from federal environmental
regulations are discussed by sector. The economic impacts are drawn up by comparing
the "without" scenario—a simulation without the incremental costs—to the "with"
scenario—a simulation with the incremental costs.
PRICES
The incremental costs of federal pollution control raise the rate of price increase
in three ways.
1. The operating and maintenance costs raise the unit cost of output. A firm
now requires additional labor and materials to produce a given level of output.
A firm is producing a joint product of its output and a cleaner environment,
although the benefits from the cleanup are not incorporated in this analysis.
2. Incremental investment costs raise the capital cost per unit of output. A
firm's capital is diluted by the portion required to control pollution rather
than produce output.
3. Incremental investment needed to meet the federal regulations increases
demand on the industries supplying those investment goods"and their suppliers.
The impact on prices depends on underlying economic conditions. The impact
is accelerated in the 1972-1973 and 1977-1979 boom periods, when the economy
was already experiencing price pressures.
Initially, incremental pollution costs reduce corporate profits, until firms can
pass these added costs into higher product prices. The speed of this pass-through
was determined on an industry-specific basis, using a simple model relating prices
to unit costs, productivity, and capacity utilization. Labor productivity declines
for two reasons. First, more workers are required to produce a given level of
output, as some workers operate and maintain the pollution control equipment.
Second, productive capital per worker is lower, as the capital stock is diluted
with the portion of capital required to control pollution. Productivity is 0.3%
lower in 1980 and 0.9% lower in 1987. Productivity growth falls 0.1 percentage
point per year on average over the entire period.
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The impact on the rate of price increase is noticeable, given the increases in
unit costs, reduced productivity, and added demand pressures. The producer
price index is 4.1% higher in 1980 and 9.0% higher in 1987. The average annual
rate of change in producer prices is raised 0.5 percentage point over the period
1970-1987. The effect on consumer prices is smaller, with their average annual
rate of change increased 0.* percentage points per year.
BUSINESS FIXED INVESTMENT
The incremental investment costs to industry (excluding state and local costs
and mobile source costs) rise from $2.9 billion in 1970 to $7.6 billion in 1980.
.The costs peak at $11.9 billion in 1986 and fall slightly to $11.6 billion in 1987.
Over the historical period 1970-1980, incremental investment costs average
of total plant and equipment investment. Over the forecast period 1981-1987,
this ratio averages 3.6%.
Incremental investment costs increase total business fixed investment. Incremental
investment represents increased demands on industries that produce pollution
control plant and equipment. These increased demands generate additonal output
and employment which in turn increased investment. Business fixed investment
rises, with the peak stimulative effect occurring in 1973, up $6.0 billion or 2.6%
from those levels that would otherwise have occurred. Eventually, higher rates
of price increase drive up interest rates and reduce demand so tfiat in 1987, investment
is up only $0.9 billion or 0.3%.
The effect on "productive" (excluding pollution control) investment is more pronounced.
Incremental investment costs raise the effective cost of investment. More investment
is now required to produce a given level of output, causing firms to require a
higher rate of return from productive investment. This increased rate of return
depresses investment. The negative impact of a higher required rate of return
(as well as reduced aggregate demand and higher interest rates) is greater than
the positive stimulus to investment from the incremental costs. By 1987, productive
investment is $13.9 billion or 4.0% lower.
10
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INTEREST RATES
Incremental pollution control costs raise interest rates significantly, as investors
require higher nominal interest rates to compensate them for the costs of lending
that stem from higher price increases. Interest rates increase steadily as prices
rise. Higher prices also generate an eventual reduction in real activity, which
reduces pressures on interest rates as loan demands subside. For example, the
increase in the federal funds rate peaks at 1.87 percentage points in 1982 and
declines to 0.80 percentage point in 1987. Interest rates do rise more than enough
to cover the price increases so that, in general, real interest rates are higher.
HOUSING
Higher interest rates drive down business fixed investment and reduce housing
activity. Housing starts are lower in every year, but the decline varies over
time. In 1979, near the end of the economic expansion, housing starts are 88,000
units or 4.3% lower. In 1987 when the economy is approaching full employment,
so that competing investment demands dry up traditional mortgage funds, housing
starts are lower by 115,000 units or 5.2%.
CONSUMER SPENDING
Initially, real consumer spending rises because of incremental costs of emission
controls to meet federal regulations. Vehicle emission controls increase maintenance
expenditures and, (because fuel consumption is increased), gasoline purchases
rise; they also increase car prices, which tends to drive down vehicle purchases.
Secondary effects from increased activity in firms producing pollution control
plant and equipment and their suppliers also tend to raise consumer spending
initially . However, by 1977, consumer spending falls in response to higher prices
and interest rates. By 1987, consumer spending is $18.7 billion or 1.0% lower.
Purchases of motor vehicles and parts are particularly hard hit, down $7.0 billion
or 5.8%. The only consumer spending categories still higher in 1987 are gasoline
and transportation services (maintenance expenses).
II
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GOVERNMENT
FEDERAL
In this analysis, federal expenditures are assumed to be constant in real terms.
This means that the federal government maintains a specific level of services
and adjusts the dollar level of spending in response to changing price levels.
For this reason, nominal expenditures are higher because prices are higher. Receipts
are also higher, but by a smaller amount, as the higher price level boosts nominal
incomes and taxes. Initially, real incomes are also higher, due to the increased
economic activity which further boosts tax receipts. However, the net effect
on the federal deficit is negative after 1974. By 1987, the deficit is $10.2 billion
larger in current dollars.
STATE AND LOCAL GOVERNMENTS
Federal regulations require state and local governments to construct waste water
treatment facilities. Seventy-five percent of construction costs are funded from
federal grants-in-aid. However, the state and local governments are responsible
for the higher operating and maintenance costs associated with these facilities
and for municipal air pollution control costs. The net effect of pollution control
requirements is a slight increase in real spending. In 1987, real purchases are
$1.2 billion, or 0.4% higher.
FOREIGN TRADE
Higher pollution control costs increase domestic prices, which reduce real exports
and raise real imports. The initial stimulus to aggregate activity drives up imports,
but, eventually, as economic activity declines, imports also decline. In 1973,
real imports are $2.4 billion (or 1.2%) higher, but by 1987, they are $3.7 billion
or 1.1% lower. The stimulative effect on real exports is mild, with real exports
down by $0.4 billion or 0.2% in 1974. After that, exports are higher as foreign
economy activity does not decline as much as in the U.S. In 1979, real exports
are $1.3 billion, or 0.4% higher. The situation reverses again in 1986, as the greater
domestic price increases drive down exports. By 1987, real exports are $2.0 billion,
12
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or 0.5% lower. The net effect on the current dollar trade balance is mildly negative
until 1982; after 1982, the effect is positive but becomes negative in 1986. By
1987, the current dollar trade balance is $1.9 billion lower.
CONCLUSION
The principal results of this analysis are given below and are summarized in Table
3.
1. The average annual rate of increase in consumer prices rises 0.4 percentage
points in the period 1970-1987 as firms pass on the higher costs of pollution
control.
2. Until 1980, the real level of GNP is higher, stimulated by the federally mandated
incremental investment and operating and maintenance costs and by the
additional activity in industries supplying pollution control plant and equipment.
In 1972, real GNP is $9.2 billion or 0.5% higher. After 1979, real GNP declines
in response to the higher price level. By 1987, real GNP is $21.8 billion or
0.7% lower. The average annual rate of growth of GNP is reduced 0.1 percentage
point.
3. Employment is stimulated throughout the 1970-1987 period as jobs are created
in industries to operate and maintain pollution control plant and equipment
and in the pollution control plant and equipment (supplier) industry. In general,
the unemployment rate is 0.3 percentage points lower, and by 1987 there
are 524,000 net additional jobs as a result of pollution controls.
4. Business fixed investment is stimulated by the incremental investment mandated
by federal regulations and the additional activity generated in industries _
that produce that pollution control plant and equipment. In 1973, real business
fixed investment rises by $6.0 billion, or 2.6%. Eventually, the combined
effects of higher prices, increased interest costs and reduced aggregate
demand dampen investment spending. By 1987, real business fixed investment
is only $0.9 billion or 0.3% higher.
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SENSITIVITY ANALYSIS
Three alternative simulations were performed. The first two simulations analyze
the effects of slightly higher or considerably lower mandated pollution costs.
The third simulation analyzes the effects of a monetary policy that attempts
to neutralize the money supply increases induced by pollution control costs.
Case I: Higher Pollution Control Costs
The base case "with" simulation included certain recently announced reductions
in municipal wastewater treatment construction grants and mobile source emissions
control costs. The "with high" pollution control cost simulation includes those
costs. In 1981, these higher costs add $861 million (or 2.5%) to the mandated
incremental costs. By 1987, they add $2659 million (or 5.9%) (Tables 4 and 5).
The total increase in incremental costs from 1979 to 1987 is $12.6 billion or 2.6%.
The results from the "with high" simulation are very similar to the "with" base
case results, and are shown in Table 7.
Case 2: Lower Pollution Control Costs
A second simulation was constructed to examine the macroeconomic effects
of future incremental pollution control costs being much lower than those used
in the "with" base case simulation. This was called the "with low" simulation,
in which a gradual tapering off of incremental costs by 10% per year beginning
in 1981 was assumed. By 1987, total incremental costs had fallen to $13.4 billion
or 30% of the base case analysis estimates (Tables 4 and 5). The total reduction
in incremental costs is $116.9 billion, or 23.8%. The results are compared to
the "with" base case simulation in Table 8.
A decline in future real incremental costs reduces the effects of pollution control
on prices. By 1987, the level of the implicit price deflator has fallen 0.9% relative
to the "with" base case, and its annual ra-te of change has fallen to 7.7% per year.
This decline in incremental costs removes only 15% of the price effects of pollution
control costs.
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The effects on real GNP are less pronounced. Initially, reduced incremental
costs reduce real GNP. Reduced operating and maintenance costs require fewer
workers and materials and decreased investment costs represent a decrease in
demand on those industries that produce pollution control capital. Eventually,
firms pass on the full amount of these lower costs as lower product prices, which
stimulate aggregate demand and counteract the initial output reduction. By
1987, real GNP is $1.6 billion higher, while the unemployment rate remains 0.3
percentage points higher. Business fixed investment is down $5.6 billion or 1.6%
in 1987, while productive investment is $4.5 billion, or 1.4% higher.
Case 3: Non-Accommodating Monetary Policy
The increase in nominal GNP due to pollution control costs implies an increased
transactions demand for money. The money supply in the base case analysis increases
to accommodate this higher transactions demand. A simulation was constructed
in which the money supply does not accommodate this increased demand. Rather,
nonborrowed reserves, the main policy lever of the Federal Reserve Board, are
reduced in order to hold the money supply (as defined as Ml-B) to its level in
the "without" simulation (Table 6). This simulation is.called "offset" and is
compared to the base case simulation in Table 9.
Non-accommodating monetary policy dampens aggregate demand by raising interest
rates and depressing interest sensitive sectors of the economy such as housing.
By 1987, real GNP falls $9.3 billion or 0.3%, and the unemployment rate is 0.1
percentage point higher. Business fixed investment is down $0.8 billion or 0.2%
by 1987, while productive investment falls $0.4 billion or 0.1%. Reduced aggregate
demand also reduces prices. By 1987, the level of the implicit price deflator
is down 1.9%, and its average annual rate of change falls to 7.6%. This means
that about one-fourth of the inflationary effect of pollution control costs on
prices can be attributed to the.money supply assumptions in the base case.
SUMMARY
A comparison of the alternative simulations is shown in Table 10.
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Table 1
Estimated Incremental Operating and Maintenance Costs
For Pollution Control, 1970-1987
(Millions of 1979 dollars)
TOTAL
All Indus.
Mfg. Indus.
Primary Metals
Elcc. Machinery
flon-elec. Mach.
Transp. Equip.
Stone, Clay,' Glass
Olli. Durables
Fond Incl. Beverage
T<;xt 1 Ics
Pil'l. .
Chctiil ca 1
Petroleum
Ruhher
Oth. Nondurable*
Nonmanuf acturlng
Mining
Piihl Ic Utll Hies
Conmcrclal
State and Local Govt.
Mohtle Source Controls
1970
3023
950
406
169
3
4
4
1
7
9
6
6
177
96
2
2
473
54
400
19
0
2064
1971
4395
1349
762
210
6
6
1C
12
18
24
0
35
213
140
3
3
674
60
540
47
27
3019
1972
6236
1861
906
265
10
9
31
26
35
43
10
72
257
220
3
5
870
69
727
82
61
4311
1973
0622
2612
1403
349
18
15
51
40
62
60
14
122
315
320
5
0
1209
01
997
131
100
5910
1974
9531
3306
1036
4.10
25
22
72
71
92
94
17
173
374
441
6
11
1550
92
1276
102
175
5970
1975
9965
4134
2302
539
3?
29
91
101
130
117
20
242
450
527
9
15
1032
95
1537
200
204
5547
1976
10544
4944
2041
674
37
34
102
123
160
135
24
322
552
640
11
19
2103
102
1700
221
390
5202
1977
11375
5729
3311
709
42
40
113
134
101
156
29
372
671
747
13
24
2410
111
20G6
241
537
5109
1970
12299
6409
3753
090
47
45
123
144
200
177
34
420
705
037
15
20
2736
116
2359
261
692
5110
1979
13579
7440
4270
996
71
62
162
163
237
196
37
440
052
993
21
32
3170
132
2755
283
032
5307
1900
14605
0427
4700
1101
91
75
206
101
270
212
40
404
905
1159
27
37
3639
148
3189
302
903
5195
1901
15936
9492
5305
1?32
114
90
265
202
310
229
43
520
963
1343
33
41
4107
165
3615
327
1134
5310
1902
17300
10012
6144
1379
146
107
343
231
357
249
49
556
1116
1526
40
45
4660
104
4119
365
1260
5220
1903
18329
12204
6931
1524
181
122
436
270
413
272
57
604
1270
1601
47
54
5273
203
4667
403
1300
4745
1904
20140
13760
7831
1604
224
140
545
315
476
300
65
651
1478
1833
56
64
5937
224
5271
442
1406
4006
1905
21625
15440
0005
1036
275
165
670
368
547
335
76
690
1726
1969
66
74
6635
245
5910
400
1503
4602
1906
23093
17114
9791
1900
334
106
794
424
615
371
00
745
1990
2102
70
04
7323
260
6537
518
1672
4307.
1907
24030
10709
10770
2119
390
207
917
404
602
'.412
90
791
2249
2232
09
92
0019
290
7172
557
1752
4209
-------
Table 2
Estimated Incremental Investment
For Pollution Control, 1970-1987
(Millions of 1979 dollars)
TOTAL
All Indus.
Mfg. Indus.
Primary Metals
Elcc. Machinery
Non-olcc. Mach.
Transp. Equip.
Stone, Clay', Glass
Otli. Durables
Food Incl. Beverage
Textiles
Paper
Chemicals
Petroleum
Riibhcr
Oth. Nondurables
Honiminufacturlng
Mining
Public Utilities
Commercial
State and Local Govt.
Mobile Source Controls
1970
3375
2072
1694
311
16
12
69
09
55
137
19
213
293
436
2
11
1170
69
876
234
-32
535
1971
sons
3007
2256
422.,
26
22
on
no
04
174
25
310
372
590
6
13
1551
00
1167
296
573
706
1972
6550
5400
3272
650
41
41
120
103
139
230
32
416
405
903
13
19
2207
115
1607
407
362
716
1973
7524
5665
3305
606
42
43
124
195
146
234
32
424
491
935
14
20
2200
115
1743
422
167
1692
1974
0110
5422
3613
772
40
46
110
249
190
206
30
569
626
720
32
26
1(109
20
1634
147
1610
1306
1975
10300
6054
4290
1042
27
3b
63
103
152
162
42
660
057
1010
10
30
1764
74
1516
175
1009
2445
1976
11745
5779
3733
000
29
40
65
00
106
196
50
419
990
020
21
28
2016
03
1790
172
3079
2007
1977
11633
5574
3521
040
26
36
62
02
9G
100
40
396
915
757
20
27
2053
57
1033
164
2699
3360
1970
13036
6760
3951
752
130
111
224
164
101
172
29
239
565
1294
50
32
2009
152
2472
105
2044
3432
1979
13536
7019
3977
811
114
00
261
145
166
140
31
297
440
1305
62
29
3042
167
2715
160
2831-
3606
1900
15641
7573
4541
1010
126
97
350
176
199
150
36
300
476
1536
58
27
3032
171
2658
203
2838
5230
1901
19192
9454
5797
1131
177
114
455
245
235
108
51
300
1281
1521
60
31
3657
106
3151
320
2530
7200
1902
18707
9090
5960
1110
194
100
546
327
281
209
81
397
1201
1293
70
60
3930
194
3426
318
2024
6065
1903
20153
11109
6010
1235
240
125
644
369
317
251
84
. 394
173Z
1267
80
64
4299
203
3776
320
1961
7003
1904
20416
11061
7332
1168
205
161
734
442
355
321
112
393
2066
1134
96
65
.4529
215
3994
320
1340
7215
1905
20359
11855
7390
1108
328
145
728
470
338
323
113
390
2196
1110
76
65
4465
224
3921
320
1252
7252
1906
20319
11058
7352
1066
354
140
720
499
336
375
100
308
2162
1081
56
59
4506
220
3961
322
1160
7301
1987
19979
11577
7119
1010
309
142
760
459
343
386.
105
305
2274
921
55
50
4458
216
3920
322
1044
7350
-------
Table 3
Estimated Impact of Incremental
Pollution Control Costs, 1970-1987
00
19/0 1971 19/2 1973
Ui oss National Product
WITIIBASE 992.8 107/.6 1106.3 1327. 2
WITHOUT 909.5 1070.0 1176.2 1312.7
UIFF 3.3 6.8 10.1 14.5
XOIFF 0.3 0.6 0.9 1.1
Kedl CMP (791)
WIIIIUASE 1770.5 1830.6 1934.8 2047.2
WllllOUT 1766.1 1022.9 1925.6 2030.3
01FF 4.4 7.7 9.2 0.9
XD1FF 0.2 0.4 0.5 0.4
Annual Rale of Change
W1TIIDASE -0.2 3.4 5.7 5.8
WllllOUT -0.4 3.2 5.6 5.9
DICK 0.2 0.2 0.1 0.0
XOIFF -57.9 5.6 1.0 -0.7
"rites
Implicit Price Deflator (79=1.000)
,!:,IUASE 0.561 0.5B9 0.613 0.640
WllllOUT 0.560 0.507 0.611 0.644
OlfF 0.000 0.001 0.002 0.001
XOIFF O.OOl 0.216 0.302 0.6G5
Wholesale Price Index (79-1.000)
WITIIBASE 0.467 0.483 0.504 0.571
WITHOUT 0.46/ 0.4Q1 0.501 0.565
niFF o.ooo o.oni 0.003 o.oos
XOIFF 0.106 0.303 0.549 0.9!>l
Consumer Price Inilcx (79-1. QUO)
WMIIBASE 0.534 0.556 0.575 0.611
WllllOUT 0.533 0.555 0.573 0.607
'UIFF o.ooo o.oui 0.002 0.004
XOIFF 0.073 0.196 0.357 0.634
Annual Riile of Change
WMIHIASC 5.9 4.2 3.3 6.3
WITHOUT 5.0 4.1 3.2 6.0
UIFF 0.1 0.1 0.2 0.3
XOIFF 1.3 3.1 5.3 4.9
Investment
Real lluslness Fixed Investment (79))
WITIIUASE 195.5 192.6 207.9 237.2
WIIHUIir 193.0 108.5 202.4 231.2
UIFF 2.5 4.1 5.5 6.0
• XI) 117 1.3 2.? 2.7 2.0
19/4
1435.3
1417.;
17.6
1.2
2034.8
2028.5
6.3
0.3
-0.6
-0.5
-0.1
25.8
0.705
0.699
0.006
0.923
0.678
0.669
0.009
1.381
0.6/8
0.6/2
0.006
0.939
11.1
10.7
0.3
3.1
23J.I
220.5
4.6
19/5
1549.9
1527.2
22. f.
1.5
2U11.-J
2007.3
4.7
0.2
-1.1
-1.0
-O.I
7.5
0.7711
0.761
0.009
1.247
0.741
0.729
0.013
1.710
0.7411
0.731
0.009
1.264
9.1
- o.n
0.4
4.0
204.7
.200.-J
3.9
1.9
,97.
1/10.7
1600.7
30.0
1.0
2119.9
2115.2
4.7
0.2
5.4
5.4
0.0
-0.2
0.811
0.790
0.01?
1.553
0.7/fc
0.760
0.015
2. 021)
O./ltJ
0.771
0.012
1.559
5.7
5.1
0.3
5.7
212JI
3.2
1. 5
I9/7
1920.2
1803.3
36.9
2.0
2Z3/.3
2234.0
2.5
0.1
5.5
5.7
-0.1
-2.0
0.8'jQ
0.843
O.OIC
1.043
0.023
0.1104
0.019
2.342
0.034
0.019
0.015
1.041
6.5
6.2
0.3
4.8
241.1
230.6
2.5
1.0
19/8
2159.6
2114.5
45.0
2.1
2344.5
2343.9
0.6
0.0
4.8
4.9
-0.1
-1.9
0.921
0.902
0.019
2.106
O.UUU
O.U65
0.023
2.619
0.898
0.8110
0.019
2.112
/.B
7.5
0.3
3.8
203.5
261.0
2.5
1.0
19/9 19UO
2417.9 2632.7
2359.0 2550.4
50.0 74.3
2.5 2.9
2417.9 2414.6
2417.7 2415.9
0.2 -1.3
0.0 -0.1
3.1 -0.1
3.1 -0.1
0.0 -0.1
-0.5 01.0
1.000 1.090
0.976 1.059
0.024 0.031
2.407 2.959
1.000 1.141
0.971 1.102
O.Ql'9 0.039
3.010 3.548
1.000 1.134
0.976 1.103
0.024 0.031
2.421 2.018
11.3 13.4
11.0 13.0
0.3 0.4
3.1 3.4
2011. 4 27fl.!>
278.2 260.4
2.2 2.1
0.0 0.0
1981
2924.7
2832.3
92.4
3.1
2428.6
2432.6
-4.0
-0.2
0.6
0.7
-0.1
-16.1
1.204
1.164
0.040
3.434
' 1.290
1.240
0.050
4.060
1.265
1.225
0.040
3.261
11.5
11.0
0.5
4.3
262. V
260.1
2.9
1.1
1982
3310.0
J202.5
115.5
3.6
2510.3
2517.3
-6.9
-0.3
3.4
3.5
-0.1
-3.3
1.322
1.272
0.0'jO
3.093
1.451
1.307
0.063
4.571
1 . 394
1.346
0.040
3.540
10.2
9.9
0.3
3.0
2/4^6
2.3
0.0
1983 1904
3732.5 4100.7
3507.2 4000.7
145.3 100.0
4.1 4.5
25S2.5 2669.9
2591.8 2682.6
-9.3 -12.7
-0.4 -0.5
2.9 3.4
3.0 3.S
-O.I -0.1
-2.9 -3.4
1.445 1.566
1.304 1.491
0.061 0.075
4.426 4.997
1.624 1.775
1.543 1.677
o.nno 0.098
5.202 5.054
1.527 1.654
1.468 1.583
0.05U 0.071
3.980 4.494
9.5 8.4
9.0 7.8
0.5 0.5
5.1 6.8
291.4 3115.0
209.0 303.4
2.3 2.4
0.0 0.0
1985 1906
4737.2 5260.7
45011.0 4970.2
229.1 290.5
5.1 5.8
27UU.O 2049.4
2795. C 2067.2
-15.6 -17.9
-0.6 -0.6
4.1 2.5
4.2 2.6
-0.1 -O.I
-2.1 -2.5
1.704 1.1149
1.613 1.736
0.091 0.113
5.674 6.499
1.949 2.147
1.027 1.992
0.122 0.156
6. 690 7.010
1.79G 1.949
1.709 1.042
0.007 0.107
5.115 5.025
0.6 0.5
7.9 /.O
0.6 0.7
B.I 9.3
323.9 339.5
322.0 330.0
1.9 1.6
0.6 0.5
1907
5847.0
5484.5
362.5
6.6
2927.3
2049.1
-21.8
-0.7
2.7
2.9
-0.1
-4.3
l.'J'J/
1.060
0.1311
7.405
2.347
2.152
0.195
9.044
2.107
1.977
0.130
6.580
0.1
7.4
0.0
10.4
349.9
349.0
0.9
0.3
-------
Table j> ,Continued)
1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 19(12 1983 1904 19U5 1986 1987
Producers' Purahlp Equipment
WITIIDASE 111.9 111.0 123.1 IIS. 3
WllllOllf 109.7 107.8 118.6 110. 5
OIIF 2.2 3.3 4.5 4.8
XOIFF 2.0 3.0 3.« 3.4
flonresltlenllal Construction
WIIIIOASE 07.4 05.2 80. 0 94.3
WITHOUT 07.3 84.5 07.2 93.3
OlfF O.I 0.7 0.7 l.O
XDIFF 0.1 O.R O.B 1.0
Housing Starts (ml)
UHIIUASF. 1.44
WITHOUT 1.44
DIFF 0.00
XOIFF -0.25
Traile
Real Imports (791)
HIUIOASE 163.6
WlUIUUr 162.7
DIFF 1.0
XOIFF 0.6
Real Exports (79J)
WUIIDASE 135.3
WITHOUT 135.4
OIFF 0.0
XlllFF 0.0
. units)
2.04
2.05
-0.01
-o.fie
170.4
168.7
1.7
1.0
136.2
136.4
-0.2
-0.1
2.36 2.05
2.39 2.08
.0.02 -0.03
-0.94 -1.67
100.6 201.0
186.4 198.7
2.2 2.4
1.2 1.2
148.7 186.7
149.0 187.1
-0.3 -0.4
-0.2 -0.2
147.5
143.5
4.0
2.R
06.9
86.5
0.4
0.4
1.33
1.37
-0.04
-2.R8
198.3
196.7
1.6
o.n
208.2
208.6
-0.4
-0.2
129.7
175.9
3.9
3.1
76.1
76.4
-0.3
-0.4
1.16
1.19
-0.03
-2.07
175.3
174.5
0.7
0.4
198.7
190.7
0.1
0.0
137.6
134.4
3.2
2.4
78.4
70.8
-0.3
-0.4
1.53
1.59
-0.06
-3.48
207.8
200.1
-0.3
-0.1
211.3
210.7
0.6
0.3
160. 0
157.1
2.9
1.0
01). 6
81.3
-0.7
-0.9
1.9/
2.05
-0.08
-4.14
224.2
224.9
-0.7
-0.3
217.2
216.2
1.0
0.5
1/4.3
1/1.1
3.2
1.9
811.8
09.9
-1.1
-1.2
2.01
2.10
-0.09
-4.21
253.2
214.0
-0.8
-0.3
244.7
243.6
1.1
0.5
1113.8
ini.o
2.9
1.6
0.5
583.0
Sfll.7
1.4
0.2
00.7
90.5
-1.0
-2.0
95.4
95.8
-0.5
-0.5
540.5
546.1
2.4
0.4
607.9
606.7
1.2
0.2
98.4
100.6
-2.2
-2.2
103.3
104.0
-0.7
-0.7
5G8.2
566.0
2.2
0.4
635.4
6.14.5
0.9
d.l
101.9
104.7
. -2.n
-2.7
111.3
112.1
-0.8
-0.7
0(10.3
506.5
1.0
0.3
6/0.0
rif.9.7
0.3
0.0
95.6
90.7
-.1.1
-3.1
117.0
110.0
-0.9
-o.n
61)3.2
fiOI.7
l.S
11.2
6-J/.2
6V7.3
-0.1
0.0
83.1
86.8
-3.6
-4.2
112. 8
113.6
-0.9
-0.0
600.2
607.2
1.0
0.2
715.4
716.3
-0.9
-0.1
86.9
91.9
-4.9
-5.4
114.6
115.7
-1.1
-0.9
605.4
604.0
0.6
0.1
735.1
736.5
-1.4
-0.2
96.5
102.0
-5.5
-5.4
119.0
120.4
-1.4
-1.2
610.6
610.6
O.A
0.0
754.5
756.6
-2.2
-0.3
95.0
101.6
-5.9
-5.8
123.6
125.4
-1.7
-1.4
620.4
621.2
-0.0
-O.I
/77.3
780.2
-2.9
-0.4
103.?
109.5
-6.3
-5.8
131.1
133.2
-2.1
-1.6
633.0
634.7
-1.7
-0.3
000.2
009.6
-3.4
•0.4
109.6
116.2
-6.6
-5.6
139.0
141.2
-2.2
-1.6
640.1
650.5
-?.4
-0.4
037.9
042.1
-4.1
-0.5
111.4
tin.o
•6.6
-5.6
143.3
145.5
-2.2
-1.5
660.1
663.1
-3.1
-0.5
nc/.i
071.7
-4.7
-0.5
114.2
121.2
-;.o
-5.8
140.3
150.6
-2.3
-1.5
672.4
676. S
-4.1
-0.6
8%. 5
901.9
-5.3
-0.6
-------
Table 3 (Continued)
1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 19dZ 1983 1984 1985 1986 1987
M
O
Incomes
OlnposJhle Income
WllMOAir 695.3 751.0 H10.4
WITHOUT 694.0 748.6 005.5
OIFF 1.3 3.1 4.9
XOIFF 0.2 0.4 0.6
Real Disposable Income (79J)
W11IIOASE 1271.7 1266.0 1317.3
WIllinUT 1220.3 1264.0 1314.0
Hire lyl ID 11
Oil F 1.4 i.o J. J
X01FF 0.1 0.2 0.2
Before-lax Corporate Profits
wmillrtSE 75.5 06.5 100.0
UlllinuT 74.5 04.0 90.0
01TF 1.0 1.7 2.0
xoirr 1.3 2.0 2.0
Aftertax Corporate Profits
WITItBASE 41.3 49.0 59.1
HI1IIOUT 40.7 40.0 57.8
niFF 0.5 1.0 1.2
XOIFF 1.3 7.1 2.2
Real Aftertax Profits (791)
WIIIIIIASC 76.5 116.7 100.6
VmilUUI 75.6 05.1 99.0
I11FF 1.0 1.5 1.7
XIIIFF 1.3 i.n 1.7
Olhnr Indicators
Stale A Loral Gnv't Bond Rale (X)
WIINIIASE 6.12 5.22 5.04
WllllOlir 6.10 5.16 4.95
DIFF 0.02 0.05 0.09
XOIFF 0.32 1.06 1.01
Unemployment Rale (X)
HlllinASE 5.0 6.0 5.6
WITHOUT 5.1 6.1 5.0
UIFF -0.1 -0.2 -0.2
Industrial Production Index ('9=1
WIlliriASE 0.707 0.718 O.J05
Wllllliur 0.705 0.715 0.703
DIFF 0.001 0.003 0.001
XniFF 0.200 0.430 0.340
914.9
9(17.2
7.7
0.0
1406.9
110*1.2
2C
. D
0.2
126.0
123.4
2.5
2.1
76.0
75.1
1.7
2.2
125.2
123.5
1.7
1.4
5.00
4.06
0.14
2.79
4.0
5.1
-0.2
.000)
o.nsi
0.049
0.002
0.216
999.0
9(111.3
HI. 1
1.1
1395.5
139-1.6
On
.y
0.1
136.9
135.2
1.7
1.3
05.3
01.0
1.2
1.4
125.5
125.1
0.4
0.3
5.90
5.71"
0.19
3.39
5.6
5.0
-0.2
o.mo
0.049
-o.noi
-0.0!)2
1096.7 1195.1
1001.9 1175.2
14.9 19.9
1.4 1.7
1423.4 1474.6
1423.5 1474.0
0.0 0.0
132.1 166.2
130.6 164.4
1.5 1.7
1.1 1.1
(11.5 102.1
P0.3 101.0
1.2 1.4
1.5 1.4
105. (1 127.1
105.7 127.6
0.1 -0.5
0.1 -0.4
6.43 5.66
6.21 5.41
0.21 0.23
3.46 4.17
0.5 7.7
8.7 7.9
-0.2 -0.2
77 -? 7
0.772 O.OB4
0.7/5 0.057
-0.003 -0.003
-0.391 -0.393
1312.0
1207.9
24.9
1.9
1527.6
1529.1
1 4
-0.1
193.1
191.1
2.0
1.0
120.3
110.7
1.6
1.3
110.B
Hl.fl
-I.O
-0.7
5.20
4.97
0.24
4.79
7.0
7.3
-0.2
-3.2
0.906
0.910
-0.005
-0.495
1161.0
1433.6
31.1
2.2
1595.5
1097. 7
-? 1
-0.1
224.3
222.5
1.0
0.0
110.9
139.3
1. 6
1. 2
I53.0
154.0
-I.O
-I.)
5.52
5.27
0.26
4.92
6.0
6.2
-0.2
-3.6
0.959
0.9f>6
-0.007
•0.707
1641.2
IR03.7
40.5
2.5
1643.9
1647.0
-3.1
-0.2
256.2
252.2
4.0
1.6
168.3
165.2
3.1
1.9
ir.n.3
lf.9.7
-1.4
-o.n
5.93
5.61
0.29
5.22
5.0
6.0
-0.3
-4.2
1. 000
1. 006
-0.006
-0.639
1024.9 2030. 1
1772.0 1972.5
S2.I 65.9
2.9 3.3
1654.9 1672.2
16!>9.7 167U. 4
-4.0 -7.2
-0.3 -0.4
245.6 230.7
240.4 226. 1
5.3 4.7
2.2 2.1
164.3 152.1
160.3 14B.3
4.0 3.0
2.5 2.6
150.7 120.5
151.0 129.9
-1.0 -1.4
-0.7 -1.1
7.06 0.76
7.51 0.39
0.34 0.37
4.57 4.40
7.2 7.0
7.5 . 0.1
-0.3 -0.3
-3.8 -3.7
0.9C.3 0.977
0.970 0.987
-0.007 -0.010
-0.734 -0.991
2303.0 2500.6
??20.6 24/6.3
OJ.3 104.3
3.7 4.2
1723.4 1766.6
1731.3 1/75.3
-7 9 -8.6
-0.5 -0.5
265.4 295.3
259.4 206.6
6.0 0.7
2.3 3.0
173.3 193.2
161). 6 106.6
4.7 6.6
2.0 3.5
133.5 136.4
135.3 130.1
-1.9 -1.7
-1.4 -1.2
9.00 (1.42
0.60 7.99
0.40 0.43
4.70 5.39
7.1 7.0
7.4 7.4
-0.3 -0.3
-4.1 -4.4
1.059 1.105
1.U70 1.117
-0.012 -0.013
-1.003 -1.150
20(1(1.4
2760.0
120.4
4.7
1026.4
1037.3
-10.9
-0.6
313.2
301.5
11.7
3.9
206.0
197.3
0.7
4.4
134.3
135.7
-1.4
-1.0
0.08
7.63
0.45
5.83
7.0
7.4
-0.3
-4.6
1.153
1.169
-0.015
-1.308
3239.9 3599.4
3079.1 3390.2
160.7 201.2
5.2 5.9
1094.4 1946.4
1906.2 1950.0
-11.8 -12.4
-0.6 -0.6
391.4 403.6
372.0 377.6
19.4 26.0
5.2 6.9
254.4 264.8
240.9 247.0
13.5 17.8
5.6 7.2
152.7 146. 9
153.7 147.0
-1.0 -O.I
-0.7 -0.1
0.42 8.36
7.95 7.86
0.47 0.51
5.90 6.43
6.5 6.3
6.9 6.7
-0.4 -0.4
-5.J -5.9
1.229 1.258
1.246 1.274
-0.016 -0.016
-1.290 -1.260
3907.1
3739.2
247.9
6.6
1990.0
2013.7
-14.9
-0.7
433.2
400.4
32.8
0.2
205.1
262.9
22.2
8.5
146.7
146.6
0.1
0.1
8.03
7.54
0.54
7.22
6.2
6.7
-0.4
-6.2
1.292
1.310
-0.018
-1.3U5
-------
Table 5
Assumptions in the High and Low
Pollution Control Cost Alternatives
(Millions of 1979 dollars)
IVi
,11101 COST ,CASE
STATE AND LOCAL
1979
19(10
1901
1902
1903
1901
1905
1906
190/
INCREMENTAL
INVESTMENT
3459
3720
3391
2053
2206
1802
1992
2070
1903
DIFFERENCE
FROM
WITH
CASE
620
090
061
029
215
462
740
910
059
MOUILE SOURCE
INCREMENTAL
INVESTMENT
3606
5230
7200
6065
7103
7415 -.
7552
7601
7650
DIFFERENCE
FROM
WITH
CASE
...
—
—
—
100
200
300
300
300
CONTROLS
OPERATING
AND MAINTENANCE
COSTS
5307
5195
5310
5220
5245
5306
5602
5007
5709
DIFFERENCE
FROM
WITH
CASE
—
— •
• —
—
500
500
1000
1500
1500
TOTAL
DIFFERENCE
FROM WITH
CASE
620
090
061
029
045
1162
2040
2710
2659
PERCENT
OF
WITH
CASE
2.3
2.9
2.5
2.3
2.2
2.9
4.9
6.3
5.9
LOW cr
1901
1902
1903
1904
19(15
1906
1907
ST CASE
TOTAL
INCREMENTAL
COSTS
. 31615
20070
26937
24334
20992
17365
13443
PERCENT
OF
WITH
CASE
90
00
70
60
50
40
30
-------
Table 4
Incremental Pollution Control Costs
Used.In Each Simulation
(Millions of 1979 dollars)
OASE CASE:
Incremental Investment
Incremental OlM
HIGH COST:
Incremental Investment
Incremental OiM
LOW COST:
Incremental Investment
Incremental Oirt
CONSTANT M3IIEY SUPPLY:
Incremental Investment
Incremental O&M
WI1II1UT:
Incremental Investment
Incremental OW
1970
3375
3023
3375
3023
3375
3023
1971
5006
4395
5006
4395
5006
4395
107?
6550
623G
6550
6236
6550
6236
1973
7521
0622
7521
6622
7524
0622
12L1
04 HI
953I
0410
9531
011(1
9531
±975
10300
9965
1030S
9965
10300
. 9965
]976
11715
10514
II 745
10514
11745
10544
llll
11033
11375
116.13
11375
11633
11375
J9/U
13030
12290
13036
IZ299
13036
12299
Same
Siime
1979 19JJQ
135.16 15641
13579 14605
14164 16531
13579 14605
13536 15641
13579 14605
as Case Case
us Dasc Case
-0-
-0-
1901
19193
15936
20053
15936
17273
14342
19JJ2
107U7
17300
19616
17300
15030
13(110
I903
20153
10329
20498
18829
14107
12030
1904
20416
20140
21078
20640
12250
12004
1985
20359
21625
21399
22625
10100
10012
1906
20319
23093
21537
24593
0120
9237
J907
19979
24030
21138
26330
5994
7449
to
N)
-------
Table 6
Assumptions in the Constant Money Supply Case
1970
1971
1972
1973
1974
1975
1976
1977
1978
1979
1980
1981
1982
1983
1984
1985
1986
1987
DESIRED
REDUCTION
IN MONEY
SUPPLY
(BILLIONS)
0.2
0..4
0.6
0.8
0.9
1.2
1.4
1.7
2.0
2.6
3.1
3.8
4.6
5.7
7.2
9.1
11.5
14.3
REQUIRED
DECREASE IN
NONBORROWED
RESERVES
(IN BILLIONS)
0.00
0.06
0.12
0.09
0.23
0.13
0.17
0.20
0.26
0.42
0.30
0.57
0.51
0.56
0.62
0.67
. 0.78
0.78
23
-------
Table 7
Estimated Impact of Incremental
Pollution Control Costs, 1970-1987
Higher Pollution Control Costs
1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1900 1901 1982 1983 1904 19B5 1986 1987
U m I I
OIFF
XDIFF
992 B 1077 6 1186 3 1327 2 1435 3 1549 9 1718 7 1920.2 2159.6 2417.9 2632.7 2924.7 3318.0 3732.5 4180.7 4737.2 5268.7 5847.0
"iiS OlM IIS!) 1327:! 1435:5 IwIJ 1718:7 1920.2 2159.6 2418.3 2633.7 2926.1 3319.7 3734.7 4184.3 4743.9 5279.8 5862.1
0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 -0.4 -1.0 -1.4 -1.7 -2.2 -3.6 -6.B -11.2 -15.1
0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 -0.1 -0.1 -0.1 -O.I -0.2 -0.3
RewiTHRA
-------
Table 7 (Coi,...iued)
1970 1971 1972
l977 l978 1979 190° 19Bl I902 19W 19M 198S 19B6 1987
to
Producers' Durable Equipment
UITIIDASE 111.9 111.0 123.1
HITIIIIIGII 111.9 111.0 123.1
01FF 0.0 0.0 0.0
XDIFF 0.0 0.0 0.0
Nonresldcntlal Construction
W1TH8ASE 87.4 65.2 88.0
UlTIIHIGII 87.4 85.2 88.0
DIFF 0.0 0.0 0.0
XDIFF 0.0 0.0 0.0
Housing Starts (mil. units)
WITIIDASE 1.44 2.04
WITKIUGII 1.44 2.04
DIFF 0.00 0.00
XOIFF 0.00 0.00
Trade
Real Imports (79$)
WITIIOASE 163.6 170.4
KITIIHIGII 163.6 170.4
OIFF 0.0 0.0
XOIFF 0.0 0.0
Real Exports (79$)
WITIIDASE 135.3 136.2
WITIIIIIGH 135.3 136.2
DIFF 0.0 0.0
XOIFF 0.0 0.0
Real Consumption (791)
Motor Vehicles & Parts
HITIIDASE 59.2 70.6
W Illlll i Gil 59.2 70.6
OIFF 0.0 0.0
XOi.'-V 0.0 0.0
Other Durables
HITIIDA5E 70.2 72.6
Wl IIIIIIGII 70.2 72.6
DIFF 0.0 0.0
XDIFF 0.0 0.0
\
Nondurable*
WITIIOASE 402.8 491.2
KII:'i!|3! 402.0 .,1.2
-•-.* o.o o.o
XiHFF 0.0 0.0
Services
'• KITIIDASE 485.7 503.0
UlTIIHIGII 405.7 503.0
DIFF 0.0 0.0
XnVFF 0.0 0.0
2.36
2.36
0.00
0.00
188.6
188.6
0.0
0.0
148.7
140.7
0.0
0.0
81.3
81.3
0.0
0.0
80.9
00.9
0.0
0.0
511.6
511.6
0.0
0.0
527.9
527.9
0.0
0.0
145.3
145.3
0.0
0.0
94.3
94.3
0.0
0.0
2.05
2.05
0.00
0.00
201.0
201.0
0.0
0.0
186.7
186.7
0.0
0.0
87.6
07.6
0.0
0.0
89.4
09.4
0.0
0.0
524.1
524.1
0.0
0.0
550.5
550.5
0.0
0.0
147.5
147.5
0.0
0.0
06.9
86.9
0.0
0.0
1.33
1.33
0.00
0.00
198.3
198.3
0.0
0.0
208.2
208.2
0.0
0.0
72.9
72.9
0.0
0.0
90.1
90.1
0.0
0.0
516.1
516.1
0.0
0.0
564.7
564.7
0.0
0.0
129.7
129.7
0.0
0.0
76.1
76.1
0.0
0.0
1.16
1.16
0.00
0.00
175.3
175.3
0.0
0.0
198.7
190.7
0.0
0.0
73.4
73.4
0.0
0.0
89.8
09.0
0.0
0.0
524.4
524.4
0.0
0.0
503.0
503.0
0.0
0.0
137.6
137.6
0.0
0.0
78.4
78.4
0.0
0.0
1.53
1.53
0.00
0.00
207.8
207.8
0.0
0.0
211.3
211.3
0.0
0.0
00.7
88.7
0.0
0.0
95.4
95.4
0.0
0.0
548.5
548.5
0.0
.0.0
607.9
607.9
0.0
0.0
160.0
160.0
0.0
0.0
80.6
80.6
0.0
0.0
1.97
1.97
0.00
0.00
224.2
224.2
0.0
0.0
217.2
217.2
0.0
0.0
SO. 4
90.4
0.0
0.0
103.3
101.3
0.0
0.0
560.2
560.2
0.0
0.0
635.4
635.4
0.0
0.0
174.3
174.3
0.0
0.0
08.0
88.8
0.0
0.0
2.01
2.01
0.00
0.00
253.2
253.2
0.0
0.0
244.7
244.7
0.0
0.0
101.9
101.9
0.0
0.0
III. 3
111.3
0.0
0.0
500.3
508. 3
0.0
0.0
670.0
670.0
0.0
0.0
183.8
103.9
0.0
0.0
96.5
96.5
0.0
0.0
1.72
1.72
0.00
0.03
268.4
268.4
0.0
0.0
201.8
281.8
0.0
0.0
95.6
95.6
0.0
0.0
117.0
117.1
0.0
0.0
603.2
603.2
0.0
0.0
697.2
697.2
0.0
0.0
175.2
175.3
-0.1
0.0
95.8
95.8
0.0
0.0
1.32
1.32
0.00
0.09
266.5
266.6
-0.1
0.0
309.9
309.9
0.0
0.0
83.1
03.2
0.0
0.0
112.8
112.0
0.0
0.0
600.2
608.3
-0.1
0.0
715.4
715.5
-0.1
0.0
171.0
171.1
-0.1
0.0
92.3
92.3
0.0
0.0
1.40
1.40
0.00
0.14
266.4
266.5
-0.1
0.0
300.8
300.0
0.0
0.0
86.9
87.0
0.0
0.0
114.6
114.6
0.0
0.0
605.4
605.5
-0.1
0.0
735.1
735.1
-0.1
0.0
179.9
180.0
-0.1
0.0
97.3
97.3
0.0
0.0
1.04
1.84
0.00
0.14
283.9
204.0
-0.1
0.0
323.1
323.2
0.0
0.0
96.5
96.5
0.0
0.0
119.0
119.1
0.0
0.0
610.6
610.7
-0.1
0.0
754.5
754.6
-0.1
0.0
190.0
190.2
-0.1
-0.1
101.5
101.5
0.0
0.0
1.77
1.77
0.00
0.13
297.9
298.1
-0.1
0.0
338.1
338.2
0.0
0.0
95.8
95.8
0.0
0.0
123.6
123.7
0.0
0.0
620.4
620.7
-0.3
0.0
777.3
777.6
-0.3
0.0
199.4
199.6
-0.2
-0.1
106.6
106.6
0.0
0.0
1.82
1.82
0.00
0.09
307.0
307.2
-0.1
0.0
348.5
348.6
-0.1
0.0
103.2
103.2
0.0
0.0
131.1
131.1
0.0
0.0
633.0
633.3
-0.3
-0.1
806.2
606.5
-0.3
0.0
211.3
211.6
-0.3
-0.2
112.8
112.8
-0.1
0.0
2.06
2.06
0.00
0.13
323.4
323.6
-0.2
-0.1
356.3
356.4
-0.1
0.0
109.6
109.6
0.0
0.0
139.0
139.0
•0.1
0.0
648.1
640.7
•0.6
•0.1
837.9
830.5
-0.6
-0.1
222.1
222.6
-0.4
-0.2
117.5
117.6
-0.1
-0.1
2.06
2.06
0.00
0.19
336.0
336.3
-0.3
-0.1
360.1
360.2
-0.2
0.0
111.4
111.4
0.0
0.0
143.3
143.4
-O.I
•0.1
660.1
661.0
-0.9
•0.1
667.1
667.9
-0.9
-0.1
229.9
230.4
-0.5
-0.2
119.8
119.9
-0.1
-0.1
2.09
2.09
0.00
0.24
344.7
344.9
-0.2
-0.1
371.7
372.0
-0.2
-0.1
114.2
114.2
0.0
0.0
148.3
140.4
•0.1
-0.1
672.4
673.3
-0.9
-0.1
096.5
097. 4
-0.9
-0.1
-------
Table 7 (Continued)
1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1930 1981 1982 1983 198« 1985 1906 1987
Incomes
Disposable Income
U1TIIBASE 695.3 751.8 810.4
WITMII1GII 695.3 751.8 810.4
DIFF 0.0 0.0 0.0
XDIFF 0.0 0.0 0.0
Real Disposable Income (79$)
WITIIBASE 1221.7 1266.8 1317.3
UlTHHIGII 1221.7 1266.8 1317.3
DIFF 0.0 0.0 0.0
XDIFF 0.0 0.0 0.0
Before-tax Corporate Profit!
WITIIBASE 75. S 06. S 100.8
HirillllGII 75.5 06.5 100.8
DIFF 0.0 0.0 0.0
XOIFF 0.0 0.0 0.0
Aftertax Corporate Profits
WITIIBASE 41.3 49.0 59.1
WITIIIIIGJI 41.3 49.0 59.1
DIFF 0.0 0.0 0.0
XDIFF 0.0 0.0 0.0
Real Aftertax Profits (791)
WITIIBASE 76.5 86.7 100.6
WITIIIIIGII 76.5 86.7 100.6
OIFF 0.0 0.0 0.0
XDIFF 0.0 0.0 0.0
Other Indicators
State I Local Gov't Bond Rate (X)
WITIIBASE 6.12 5.22 5.04
WITIIIIIGII 6.12 5.22 5.04
DIFF 0.00 0.00 0.00
XDIFF 0.00 0.00 0.00
Unemployment Ra'.« (X)
• WITIIBASE 5.0 6.0 5.6
WITIIIIIGII 5.0 6.0 5.5
DIFF 0.0 0.0 0.0
XOIFF 0.0 0.0 0.0
Industrial Prsrt'jct !un Index (79'1.
WI7IIDASE 0.70/ 0.718 0.705
wmilllGII 0.707 0.710 0.705
DIFF 0.000 0.000 0.000
XDIFF 0.000 0.000 0.000
914.9
914.9
0.0
0.0
1406.9
1406.9
0.0
0.0
126.0
126.0
0.0
0.0
76.0
76.8
0.0
0.0
125.2
125.2
0.0
0.0
5.00
5.00
0.00
0.00
4.8
4.8
0.0
0.0
000)
0.851
0.051
0.000
0.000
999.0
999.0
0.0
0.0
1395.5
1395.5
0.0
0.0
136.9
136.9
0.0
0.0
05.3
85.3
0.0
0.0
125.5
125.5
0.0
0.0
5.90
5.90
(TOO
0.00
5.6
5.6
0.0
0.0
0.840
O.B48
o.ono
0.000
1096.7
1096.7
0.0
0.0
1423.4
1423.4
0.0
0.0
132.1
132.1
0.0
0.0
81.5
81.5
0.0
0.0
105.8
105.8
0.0
0.0
6.43
6.43
0.00
0.00
8.5
8.5
0.0
0.0
0.772
0.772
o.ono
0.000
1195.1
1195.1
0.0
0.0
1474.6
1474.6
0.0
0.0
166.2
166.2
0.0
0.0
102.4
102.4
0.0
0.0
127.1
127.1
0.0
0.0
5.66
5.66
0.00
0.00
7.7
7.7
0.0
0.0
0.054
0.054
0.000
0.000
1312.8
1312.8
0.0
0.0
1527.6
1527.6
0.0
0.0
193.1
193.1
0.0
0.0
120.3
120.3
0.0
0.0
140.8
140.8
0.0
0.0
S.tO
5. JO
0.00
0.00
7.0
7.0
0.0
0.0
0.906
0.91)6
0.000
0.000
464.8
1464.8
0.0
0.0
1595.5
1595.5
0.0
0.0
224.3
224.3
0.0
0.0
140.9
140.9
0.0
0.0
153.0
153.0
0.0
0.0
5.52
5.52
0.00
0.00
6.0
6.0
0.0
0.0
0.959
0.9S9
0.000
0.000
1644.2
1644.4
-0.2
0.0
1643.9
1644.1
-0.2
0.0
256.2
256.3
-0.1
0.0
168.3
168.4
-0.1
0.0
160.3
168.4
0.0
0.0
5.93
5.93
0.00
-0.02
5.8
5.8
0.0
0.1
1.000
1.000
0.000
-0.011
1824.9
1825.5
-0.6
0.0
1654.9
1655.3
-0.4
0.0
245.6
245.0
-0.2
-0.1
164.3
164.4
-0.1
-0.1
150.7
150.3
-0.1
-0.1
7.86
7.86
0.00
-0.06
7.2
7.2
0.0
0.1
0.963
0.963
0.000
-0.025
2038.4
2039.2
-0.8
0.0
1672.2
1672.6
-0.4
0.0
230.7
230.9
-0.2
-0.1
152.1
152.2
-0.1
-0.1
128.5
128.5
-0.1
-0.1
8.76
8.77
-0.01
-0.09
7.8
7.8
0.0
0.2
0.977
0.970
0.000
-0.024
2303.8
2304.9
-1.0
0.0
1723.4
1723.9
-0.5
0.0
265.4
265.5
-0.1
0.0
173.3
173.4
-0.1
0.0
133.5
133. S
0.0
0.0
9.00
9.01
-0.01
-0.10
7.1
7.1
0.0
0.2
1.059
1.059
0.000
-0.017
2580.6
2501.9
-1.3
-0.1
1766.6
1766.7
-0.1
0.0
295.3
295.7
-0.3
-0.1
193.2
193.4
-0.2
-0.1
136.4
136.5
-0.1
-0.1
8.42
8.43
-0.01
-0.10
7.0
7.0
0.0
0.2
1.105
1.105
0.000
-0.024
2888.4
2890.5
-2.2
-0.1
1826.4
1826.6
-0.2
0.0
313.2
313.9
-0.6
-0.2
206.0
206.4
-0.4
-0.2
134.3
134.5
-0.2
-0.1
8.08
8.09
-0.01
-0.12
7.0
7.0
0.0
0.2
1.153
1.154
0.000
-0.043
3239.9
3243.9
-4.0
-0.1
1894.4
1894.8
-0.4
0.0
391.4
392.7
-1.3
-0.3
254.4
255.2
-0.8
-0.3
152.7
153.0
-0.4
-0.2
8.42
0.43
-0.01
-0.16
6.5
6.5
0.0
0.3
1.229
1.230
-0.001
-0.073
3599.4
3606.0
-6.7
-0.2
1946.4
1947.0
-0.6
0.0
403.6
405.6
-2.0
-0.5
264.8
266.0
-1.2
-0.5
146.9
147.4
-0.5
-0.3
8.36
8.38
-0.02
-0.25
6.3
6.3
0.0
0.4
1.250
1.259
-0.001
-0.107
3937.1
3996.4
-9.3
-0.2
1990.8
1999.5
-0.7
0.0
433.2
435.4
-2.2
-0.5
285.1
286.5
-1.4
-0.5
146.7
147.1
-0.4
-0.3
8.08
8.11
-0.03
-0.33
6.2
6.2
0.0
0.5'
1.292
1.293
-0.001
-0.104
-------
Table ,
Estimated Impact of Incremental
Control Costsi 1970-1987
Lower Pollution Control Costs
19/0 1971 1972 1973 1974 1975 1976 19/7 197U 19/9 19UO 1901 19U2 19113 1904 1985 1'JOb 19U7
NJ
"si
Cross National I'roducl
UIIIIUASE 892.U 10/7.6 1186.3 1327.2 1435.3 1549.9 171U.7 1920.2 2159.0 2417.9 2632.7 2924.7 33IU.O 3732.5 41U0.7 4737.2 526U.7 184/0
WMIILOW 992.0 1077.6 1106.3 1327.2 1435.3 1549.9 1710.7 1920.2 2159.6 2417.9 2632.7 2922.6 3312.0 3721.9 4164.9 4/14.7 5235.4 579-J.9
OIFF 00 00 00 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 2.1 6.0 10.7 15.0 22.5" 33.3 47.1
XOIFF 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.1 0.2 0.3 0.4 0.5 0.6 0.8
K*WITmiASE791770.S 1830.6 1934.0 2047.2 2034.0 2011.9 2119.9 2237.J 2344.!, 2417.9 2414.6'2420.6'2510.3 251.2.5 2669.9 2780.0 2049.4 2927.3
WIIIILOW 1770.5 1030.6 1934.8 2047.2 2034.0 2011.9 2119.9 2237.1 2344.5 2417.9 2414.6 2427.5 2500.1 25U0.3 2660.4 2779.4 2849.3 2928.9
OIFK 00 00 00 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 1.1 2.2 2.2 1.5 0.6 O.I -1.6
XDIFF 00 00 00 00 0.0 0.0 0.0 O.U 0.0 0.0 0.0 0.0 0.1 0.1 O.J 0.0 0.0 -0.1
Annual Rate of Chanyc
WITIIUASE -0.2 3.4
WITIILOW -0.2 3.4
UIFF 0.0 0.0
XOJFF 0.0 0.0
Prices
5.7
5.7
0.0
0.0
5.0
5.0
0.0
0.0
-0.6
-0.6
0.0
0.0
-1.1
-1.1
0.0
0.0
5.4
5.4
0.0
0.0
Implicit Price Deflator (79-1.000)
UIIIIUASE 0.561 0.509 0.613 0.64Q
wmiLOW 0.561 0.589 0.613 0.646
OIFF 0.000 0.000 0.000 0.000
XI1IKF 0.000 0.000 0.000 0.000
Wholesale Price Index (79-1.000)
UllllBASE 0.467 0.403 0.504
HITIILOW 0.467 0,403 0.504
DlrF 0.000 0.000 0.000
XDIFF 0.000 0.000 0.000
"r-.nstimer Price Index (79-1.000)
WITIIUASE 0.534 0.556 0.575
WIIIILOW 0.534 0.5!i6 0.575
DIFF ' 0.000 0.000 0.000
XOIfF 0.000 0.000 0.000
Annual Rate of Clungc
WITIIUASE 5.9 4.2
WIIIILOW 5.9 4.2
OIFF 0.0 0.0
XOIFF 0.0 0.0
Investment
3.3
3.3
0.0
0.0
0.571
0.571
0.000
0.000
0.611
0.611
0.000
0.000
6.3
6.3
0.0
0.0
0.705
0.705
0.000
0.000
0.670
0.670
0.000
0.000
0.670
0.670
o.onh
0.000
n.i
11.1
0.0
0.0
0.770
0.770
0.000
0.000
o.aii
0.811
0.000
0.000
0.741
0.741
0.000
0.000
0.740
0.740
O.flOO
0.000
9.1
9.1
0.0
0.0
0.776
0.776
0.000
0.000
0.783
0.703
o.ono
0.000
5.7
5.7
0.0
0.0
5.5
5.5
0.0
0.0
O.UiiU
0.858
0.000
0.000
0.823
0.823
0.000
0.000
O.U34
0.034
0.000
0.000
6.5
6.5
0.0
0.0
4.0
4.0
0.0
0.0
3.1
3.1
0.0
0.0
-0.1
-0.1
0.0
0.0
0.921
0.921
0.000
.0.00(1
O.UUU
O.OUU
0.000
0.00(1
0.09U
0.0911
0.001)
O.ODi)
7.U
7.0
0.0
0.0
1.000
1.000
0.000
0.000
1.000
1.000
0.000
0.000
1.000
1.000
0.000
0.000
11.3
11.3
0.0
0.0
1.090
1.090
0.000
0.000
1.141
1.141
0.000
0.000
1.134
1.134
0.000
0.000
13.4
13.4
0.0
0.0
0.6
O.S
0.0
0.1
1.204
1.204
0.000
0.028
1.290
1.21)9
0.001
0.049
1.265
1.264
0.000
0.037
11.5
11.4
0.0
0.4
3.4
3.3
0.0
1.4
2.9
2.9
0.0
0.0
3.4
3.4
0.0
-0.9
1.322
1.321
0.001
0.094
1.451
1.440
O.U02
0.164
1.3U4
1.393
0.002
0.108
10.2
10.2
0.1
0.0
1.445
1.442
0.003
0.200
1.624
1.618
0.006
0.345
1.527
1.523
0.003
0.225
9.5
9.4
0.1
1.4
1.566
1.561
0.005
0.324
1.775
1.765
0.009
0.529
1.654
1.648
0.006
0.350
0.4
8.2
0.1
1.7
4.1
4.2
0.0
-0.9
1.704
1.696
0.000
0.456
2.5
2.5
0.0
-0.7
1.U49
1.037
0.012
0.633
1.949
1.936
0.014
0.699
1.796
1.707
0.009
0.510
0.6
0.4
0.2
2.0
2.147
2.120
0.020
0.925
1.949
l.'JJ6
0.014
0.698
8.5
8.3
0.2
2.4
2.7
2.8
-0.1
-2.1
l.'J97
1.9UO
0.017
0.066
2.347
2.310
0.029
1.248
2.107
2.01)8
0.019
0.926
0.1
7.9
0.2
3.1
Heal Business Fixed
WIIIIOASE 195.5
WIIIILOW
DIFF
XOIFF
195. 5
0.0
0.0
Investment (791)
192.6 207.9 237.2
192.6
0.0
0.0
207.9
0.0
0.0
237.2
0.0
0.0
233.1
233.1
0.0
0.0
204.7 215.2 241.1 263.5 280.4 270.5 262.9 276. U
204.7 215.2 241.1 263.5 200.4 270.5 262.0 274.6
0.0 0.0 0.0 0.0 0.0 0.0 0.9 2.2
0.0 0.0 0.0 O.I) 0.0 0.0 0.4 0.0
201. «
200.1
3.3
1.1
305. B
301.7
4.1
1.4
323.9
319.3
4.6
1.4
339.5
334.4
5.2
1.6
349.9
344.3
5.6
1.6
-------
Table 8 (Continued)
1970 19/1 19/2 19/J
19/S 1'1/f, \<)ll 19/11 I9/-I I'JMO I Mill 1'Jlt/ 1'JIIJ 19114 I9llb 19116 19117
00
Producers' Durable tqulumenl
WITIIBASE 111.9 111.0 123.1
WIHILUW 111.9 111.0 123.1
01FF 0.0 0.0 0.0
XOIFF 0.0 0.0 0.0
Nonresldcnllal Construction
WIHIBASE 87.4 U5.2 88.0
WITIILOW 87.4 85.2 88.0
UIFF 0.0 0.0 0.0
XOIFF 0.0 0.0 0.0
Housing Starts (mil. units)
WITMOASE 1.44 2.04
WITIILOW 1.44 2.04
01 Ft-' 0.00 0.00
tr-IFF 0.00 0.00
Trade
Real Imports (791)
WITIIBASE 163.6 170.4
WITIILOW 163.6 170.4
IHFF 0.0 0.0
XOIFF 0.0 0.0
Real Exports (79J)
WITIIUASE 135.3 136.2
WITIILOW 135.3 136.2
imF 0.0 0.0
XOIFF 0.0 0.0
Rcdl Consumption (795)
Motor Vehicles & Parts
WITIIBASE 59.2 70.6
WITIILOW 59.2 70.6
niFF 0.0 0.0
XUIFF 0.0 0.0
Other Durables
WITIIBASE 70.2 72.6
WITIILOW 70.2 72.6
DITF 0.0 0.0
XO'IFF o.o o.n
Nondurable*
WIIIIIIASE 4B2\8 491.2
WITIILOW 4(12. 0 491.2
OIIF 0.0 0.0
XniFK 0.0 0.0
Services
WIIIIIIASE 485.7 503.0
Wtnil.OW 485.7 503.0
nirr o.o o.n
XI) IFF 0.0 0.0
2.36
2.36
0.00
0.00
188.6
180.6
0.0
0.0
140.7
140.7
0.0
0.0
81.3
81.3
0.0
0.0
00.9
00.9
0.0
0.0
511.6
511.6
0.0
0.0
527.9
527.9
0.0
0.0
145.3
145.3
0.0
0.0
94.3
94.3
0.0
0.0
2.05
2.05
0.00
0.00
201.0
201.0
0.0
0.0
186.7
186.7
0.0
0.0
87.6
07.6
0.0
0.0
O'J.4
89.4
0.0
0.0
524.1
524.1
0.0
0.0
550.5
550.5
0.0
0.0
147.5
147.5
0.0
0.0
U6.9
06.9
0.0
0.0
1.33
1.33
0.00
0.00
190.3
19Q.3
0.0
0.0
208.2
208.2
0.0
0.0
72.9
72.9
0.0
0.0
90.1
90.1
0.0
0.0
516.1
516.1
0.0
0.0
564.7
564.7
0.0
0.0
129.7
129.7
0.0
0.0
76.1
76.1
0.0
0.0
1.16
1.16
0.00
0.00
175.3
175.3
0.0
0.0
190.7
1911.7
0.0
0.0
73.4
73.4
0.0
0.0
89.8
09.8
0.0
0.0
524.4
524.4
0.0
0.0
5H3.0
51)3.0
n.o
0.0
137.6
137.6
0.0
0.0
78.4
70.4
0.0
0.0
1.53
1.53
0.00
0.00
207.0
207.0
0.0
0.0
211.3
211.3
0.0
0.0
08.7
0(1.7
0.0
0.0
95.4
95.4
0.0
0.0
548.5
548.5
0.0
0.0
607.9
607.9
0.0
0.0
16D.O
16n.O
0.0
0.0
(10.6
(10.6
0.0
0.0
1.97
1.97
0.00
0.00
224.2
224.2
C.O
0.0
217.2
217.2
0.0
0.0
90.4
911.4
n.o
0.0
103.3
103.3
0.0
0.0
56U.2
5611.2
0.0
0.0
63'j.4
635.4
O.I)
0."
174.J
174.3
0.0
0.0
(18.8
U8.8
0.0
0.0
2.01
2.01
0.00
0.00
253.2
253.2
0.0
0.0
244.7
244.7
o.n
0.0
101.9
101.9
0.0
0.0
111.3
111.3
0.0
0.0
5811.3
5IIII.3
U.O
0.0
670.0
670.0
0.0
0.0
183. U
183.8
0.0
0.0
96.5
96.5
0.0
0.0
1.72
1.72
0.00
0.00
26U.4
268.4
0.0
0.0
2(11.8
281.8
0.0
0.0
95.6
95.6
0.0
0.0
117.0
117.0
0.0
0.0
603.2
603.2
U.O
0.0
697.2
697.2
n.O
0.0
175.2
175.2
0.0
0.0
95.8
95.0
0.0
0.0
1.32
1.32
0.00
0.00
266.5
266.5
0.0
0.0
309.9
309.9
0.0
0.0
83.1
83.1
0.0
0.0
112.8
112.8
0.0
0.0
608.2
600.2
0.0
0.0
715.4
715.4
o.n
0.0
171.0
170.2
0.0
0.5
92.3
92.2
0.0
0.0
1.40
1.40
0.00
-0.22
266.4
265.9
0.5
0.2
3011.8
300.9
0.0
0.0
86.9
87.1
-0.1
-0.2
114.6
114.6
0.0
0.0
605.4
605.1
0.3
0.1
735.1
734.9
0.2
0.0
179.9
170.0
2.0
1.1
97.3
97.1
0.1
0.1
1.84
1.05
-0.01
-0.65
2(13.9
282.9
1.0
0.4
323.1
323.1
0.0
0.0
96.5
96.8
-0.3
-0.3
119.0
119.1
0.0
0.0
610.6
610.0
0.6
0.1
754.5
754.0
0.4
O.I
190.0
187.1
3.0
1.6
101.5
101.4
0.1
0.1
1.77
1.80
-0.03
-1.49
297.9
296.0
1.2
0.4
330.1
338.0
0.1
0.0
95.8
96.5
-0.7
-0.7
123.6
123.9
-0.2
-0.2
620.4
619.6
0.7
0.1
7/7.3
7/0.9
0.4
O.I
199.4
195.6
3.9
2.0
106.6
106.6
0.0
0.0
1.82
1.87
-0.05
-2.74
307.0
306.2
0.8
0.3
348.5
348.2
0.3
0.1
103.2
104.4
-1.2
-1.1
131.1
131.6
-0.6
-0.4
633.0
632.2
U.O
0.1
U06.2
805.8
0.4
0.0
211.3
206.9
4.5
2.2
112.0.
112.9
-0.2
-0.2
2.06
2.13
-0.07
-3.35
323.4
323.1
0.3
0.1
356.3
355.5
0.8
0.2
109.6
111.3
-1.6
-1.5
139.0
139.9
-1.0
-0.7
M7i3
O.fl
0.1
837.9
837.8
0.1
0.0
2221.]
217.0
5.2
2.4
117.5
117.9
-0.4
-0.3
2.06
2.14
-o.ou
-3.65
336.0
335.9
0.1
0.0
360.1
350.8
1.3
0.4
111.4
113.4
-2.0
-1.0
143.3
144.7
-1.4
-1.0
660.1
659.3
0.0
0.1
U07.1
067. 3
-0.1
. 0.0
229.9
224.2
5.7
2.5
119.8
120.4
-0.6
-0.5
2.oy
2.18
-0.09
-4.14
344.7
344.6
0.0
0.0
371.7
370.1
1.7
0.4
114.2
116.7
-2.6
-2.2
14(1.3
150.3
-2.0
-1 .3
672.4
671.7
0.7
0.1
836.5
097.3
-0.7
-0.1
-------
Table I Continued)
1970 1971 I97Z 19/J I9M 19/5
|IJMI
|1J"5
N)
SO
Incomes
Disposable Income
H1TIIBASE 695.3 751. B 010.4 914.9
WIIIILOW 695.3 751.8 010.4 914.9
DIFF 0.0 0.0 0.0 0.0
XDIFF 0.0 0.0 0.0 0.0
Real disposable Income (79S)
UI1IIDASE 1221.7 1266.6 1317.3 1406.9
UITIILUU 1221.7 1266.0 1317.3 1406.9
DIFF 0.0 0.0 0.0 0.0
XniFF 0.0 0.0 0.0 0.0
Uefore-tax Corporate Profits
UITIIOASE 75.5 86.5 100.6 126.0
HI 1IILOW 75.5 06.5 100.6 126.0
l)IFF 0.0 0.0 0.0 0.0
XOIFF 0.0 0.0 0.0 0.0
Aftertax Corporate Profits
UITIIOASE 41.3 49.0 59.1 76.0
H1TIILOW 41.3 49.0 59.1 76.0
OIFF 0.0 0.0 0.0 0.0
XOIFF 0.0 0.0 0.0 0.0
Real Aftertax Profits (791)
HITIIDASE 76.5 06.7 100.6 125.2
HITIILOW 76.5 06.7 100.6 125.2
DIFF 0.0 0.0 0.0 0.0
XDIFF 0.0 0.0 0.0 0.0
Other Indicators
State 1 Local Gov't Bond Rate (X)
HITllimSE 6.12 5.22 5.04 5.00
UITIILUU 6.12 5.22 5.04 5.00
DIFF 0.00 0.00 0.00 0.00
XDIFF 0.00 0.00 0.00 0.00
(Ini'inployinunt Rale (X)
HITIIUASE 5.0 6.0 5.6 4.0
UlllllOU 5.0 6.0 5.6 4.0
DIFF 0.0 0.0 0.0 0.0
XDIFF 0.0 0.0 0.0 0.0
Industrial Production Imlox (79-1.000)
HITIIUASE 0.707 '0.710 0.705 0.051
UITIILOU 0.707 0.710 0.705 0.051
DIFF o.ooo o.ono o.ono o.ono
XIMFF O.OUO 0.000 0.000 0.000
999.0
999.0
0.0
0.0
1395.5
1395.5
0.0
0.0
136.9
136.9
0.0
0.0
05.3
05.3
0.0
0.0
125.5
125.5
0.0
0.0
5.90
5.90
0.00
0.00
5.6
5.6
0.0
On
.U
0.04U
0.1)40
0.000
O.UUO
1096.7
1096.7
0.0
0.0
1423.4
1423.4
0.0
0.0
132.1
132.1
0.0
0.0
01.5
01.5
0.0
0.0
105.8
105.8
0.0
0.0
6.43
6.43
0.00
0.00
0.5
0.5
0.0
Oft
.U
0.772
0.772
0.000
0.01)0
1195.1
1195.1
0.0
0.0
1474.6
1474.6
0.0
0.0
166.2
166.2
0.0
0.0
1U2.4
102.4
0.0
0.0
127.1
127.1
0.0
0.0
5.66
5.6G
0.00
0.00
7.7
7.7
0.0
On
• U
0.054
0.0&4
0.000
O.UUO
1312.0
1312.0
0.0
0.0
1527.6
1 527.6
0.0
0.0
193.1
193.1
0.0
0.0
120.3
120.3
0.0
0.0
14U.O
140.8
0.0
0.0
5.20
5.20
0.00
0.00
7.0
7.0
0.0
On
• U
0.906
0.906
0.000
0.000
I4u4.8
1464.8
0.0
0.0
1595.5
1595.5
0.0
0.0
2
-------
Table 9
Estimated Impact of Incremental
Pollution Control Costs, 1970-1987
Constant Money Supply
19/0 19/1 1972 1973 19/4 1975 1976 19/7 1970 1979 I90U 1901 1902 1983 1904 1905 1906 1907
OFFSE1
XIMFF
9z8Jw.« 1106.3 1327.2 1435.3 1519.9 1718.7 1920.Z 2159.6 2417.9 2633.7 2924.7 3310.0 3732.5 4100.7 4737.2 5260.7 5B47.0
992.P 1076.6 1104.3 1323.9 1430.0 1541.7 1712.0 1911.5 2140. 9 2401.3 7612.1 2097.9 3270.2 3679.6 4113.0 4653.6 5167.3 5722.3
0 0 1.0 2.0 3.3 4.4 5.2 6.7 0.6 J0.7 16.6 20.6 26.8 39.0 53.0 67.7 03.5 101.3 124.7
0.0 0.1 0.2 0.2 0.3 0.3 0.4 0.5 0.5 0.7 0.0 0.9 1.2 1.4 1.6 1.0 2.0 2.2
OrFSCT
DIFF
tOlFF
17/0.5 1030.6 1934.8 2047.2 2034.8 2011.9 2119.9 2237.3 2344.5 2417.9 2414.6 2120.6 2510.3 2502.5 2669.9 2700.0 2049.4 2927.3
1770.5 1029.3 1932.8 2045.2 2033.4 2011.2 2118.9 2236.0 2343.0 2414.4 2111.2 2424.3 2502.7 2573.6 2660.6 2771.9 2041.2 2910.0
0.0 1.3 2.0 2.0 1.4 0.7 0.9 1.4 1.5 3.4 3.4 4.3 7.6 0.9 9.3 8.0 0.2 9.3
00 01 0.1 0.1 0.1 0.0 0.0 0.1 0.1 0.1 0.1 0.2 0.3 0.3 0.3 0.3 0.3 0.3
Annual Rite of Change
WITIIDASE -0.2 3.4
OFFSET -0.2 3.3
DIFF 0.0 0.1
XdllF 0.0 2.2
Prices
5.7
5.7
0.0
0.6
5.0
S.B
0.0
-O.I
-0.6
-0.6
0.0
5.2
-1.1
-1.1
0.0
2.0
5.4
5.4
0.0
0.1
5.5
5.5
0.0
0.3
4.0
4.0
0.0
0.1
3.1
3.0
0.1
2.6
-0.1
-0.1
0.0
0.4
0.6
0.5
0.0
6.8
3.4
3.2
0.1
4.0
2.9
2.0
0.0
l.S
3.4
3.4
0.0
0.2
4.1
4.2
-O.I
-1.5
2.5
2.5
0.0
-0.1
Implicit Price Deflator (79*1.000)
' WIIIIDASE 0.561 0.509 0.613 "
OFFSET 0.561 0.509 0.613
niFF 0.000 0.000 0.000
XDIFF 0.000 0.020 0.066
Wholesale Price Index (79-1.000)
KITIIOASE 0.467 0.403 0.504
OFFSET 0.467 0.482 0.503
OIFF 0.000 0.000 0.001
XDIFF 0.000 0.033 0.110
Consumer Price Index (79-1.000)
HITIIDASE 0.534 0.556 0.575
OFFSE1 0.534 0.556 0.575
ui rr o.ouo o.noo o.ouo
XDIFF 0.000 0.001 0.042
0.648
0.647
0.001
0.151
0.571
0.569
0.001
0.206
0.611
0.610
0.001
0.100
0.705
0.704
0.002
0.241
0.670
0.675
0.003
0.427
0.670
0.677
0.001
0.101
0.770
0.760
0.002
0.296
0.741
0.737
0.004
0.502
0.710
0.739
0.002
0.239
0.011
0.000
0.003
0.347
0.776
0.771
0.004
0.534
0.703
0.701
0.002
0.274
0.050
0.055
0.003
0.391
0.023
0.019
0.005
0.501
0.034
0.031
0.003
0.313
0.921
0.917
0.004
0.432
0.880
0.082
0.006
O.C37
0.090
0.095
0.003
0.346
1.000
0.995
0.005
0.550
1.000
0.9'J2
0.000
0.706
1.000
0.996
0.004
0.414
1.090
1.003
0.007
0.645
1.141
1.130
0.011
0.956
1.134
1.129
0.006
0,495
1.204
1.195
0.009
0.745
1.290
1.276
0.014
1.073
1.265
1.257
0.007
0.503
1.322
1.310
0.012
0.900
1.451
1.432
0.019
1.310
1.394
1.304
0.010
0.736
1.445
1.430
0.016
1.091
1.624
1.590
0.026
1.596
1.527
1.513
0.013
0.091
1.566
1.546
0.020
1.292
1.775
1.741
0.033
1.904
1.654
1.637
0.010
1.075
1.704
1.679
0.025
1.500
1.949
1.907
0.042
2.105
1.796
1.774
0.022
1.235
1.049
1.019
0.030
1.668
2.147
2.097
0.050
2.305
1.949
1.923
0.026
1.374
Anniiol Rate of Cliamjr:
WHIIDASE 5.9 4.2
OFFSET 5.9 4.2
D1FF 0.0 0.0
XDIFF 0.0 0.0
Investment
3.3
3.3
L'.O
1.3
6.3
6.2
0.1
1.0
n.i
11.0
0.1
0.0
9.1
9.1
0.1
0.7
5.7
5.7
0.0
0.7
6.5
6.5
0.0
O.A
7.0
7.7
0.0
0.5
11.3
11.2
0.1
0.7
13.4
13.4
0.1
0.7
11.5
11.4
0.1
0.9
10.2
10.1
0.2
1.7
9.5
9.3
0.2
l.R
0.4
0.2
0.2
2.4
8.6
0.4
0.2
2.0
0.5
0.4
0.1
1.0
2.7
2.7
0.0
1.1
1.997
1.961
0.036
1.054
2.347
2.287
0.060
2.611
2.107
2.076
0.032
1.526
0.1
0.0
0.2
2.0
HI1IIOASE lQr.-«; 107.fi 707.9 ?3/.2
OFFSEI
X01FF
195.5
0.0
0.0
197.4
0.2
O.I
207. 5
0.4
0.2
236. /
0.5
0.2
23.1.1
232.7
0.4
0.2
204.7
204.4
0.3
0.1
215.2 241.1 263.5 200.1 270.5 262.9 276.0 291.4
215.0 241.0 763.3 279.9 769.7 2fi2.1 275.3 209.3
0.2 0.1 O.I 0.5 0.7 0.0 1.5 2.0
0.1 0.0 O.I 0.2 0.3 0.3 0.6 0.7
305.8
303.6
2.2
0.7
323.9
322.2
1.7
0.5
339.5
138.5
l.i
0.3
349.9
349.1
0.8
0.2
-------
Table v . Jontinued)
1970 l'J/1 1972 19/3 1974
l'Jlll> |1JI" >IJIIif
ly'15
''•Ul/
Producers* Durable Equipment
• WITIIBASE111.9 111.0 123.1
OFFSET 111.9 110.9 122.8
our o.o o.i o.a
XUIFF 0.0 0.1 0.2
Nonresident U 1 Construct Ion
WITHBASE 07. 4 05. 2 UO.O
OFFSET 07.4 85.? 07.0
OIFF 0,0 0.0 0.1
XUIFF 0.0 0.1 0.2
Housing Starts (mil. units)
WITIIDASE 1.44 2.04 2.36
OFFSET 1.44 2.02 2.34
OIFF 0.00 0.02 0.03
XOIFF 0.00 1.06 1.08
Trade
Real Imports (79S)
HI1IIIIASE 163.6 170.4 IBS. 6
OFFSET 163.6 170.2 108.2
D1FF 0.0 0.2 0.4
XOIKF 0.0 0.1 0.2
Real Exports (791)
UHUBASE 135.3 136.2 140.7
OFFSET 135.3 136.2 148.7
OIFF 0.0 0.0 0.0
XOIFF 0.0 0.0 0.0
Real Consumption (79))
Motor Vehicles I Parts
HITIIBASE 59.2 70.6 U1.3
OFFSET 59.2 70.4 01.1
OUT 0.0 0.2 0.2
XOIFF 0.0 0.2 0.2
Oilier Durables
HITIIUASE 70.2 72.6 U0.9
OFFSET 70.2 72.5 00.0
OIFF 0.0 0.1 0.1
IDIFF 0.0 0.1 0.2
Nondurable;
HITIIDASE482.8 491.2 511.6
OFFSET 402.8 491.1 5)1.5
,. niFF 0.0 0.1 0.1
. XDIFF 0.0 0.0 0.0
Services
WIIIIUASE4US.7 503.0 427.9
OFFSET 4U5.7 502.8 527.7
OIFF 0.0 0.1 0.3
i. XDIFF 0.0 0.0 0.0
145.3
145.0
0.3
0.2
94.3
94.1
0.2
0.2
2.05
2.02
0.03
1.29
201.0
200.6
0.5
0.2
106.7
106.0
0.0
0.0
07.6
07.4
0.2
0.3
09.4
09.3
0.2
0.2
524.1
524.1
0.0
0.0
550.5
550.1
0.4
0.1
147. S
147.2
0.2
0.2
1)6.9
U6.7
0.2
0.2
1.33
1.31
0.02
1.62
198.3
190.1
0.2
0.1
208.2
200.3
-0.1
-0.1
72.9
72.0
0.1
0.1
90.1
09.9
0.2
0.2
516. 1
516.3
-0.2
0.0
564.7
564.3
0.4
0.1
129.7
129.6
II. 1
0.1
76.1
76.0
0.2
0.2
1.16
1.15
0.01
0.58
175.3
175.2
0.0
0.0
19U.7
190.8
0.0
0.0
73.4
73.3
0.1
0.2
09.8
09.7
0.1
0.1
524.4
524.7
-0.3
-0.1
503.0
502.7
0.4
0.1
137.6
137.6
0.0
0.0
70.4
70.3
0.1
0.2
1.53
1.53
0.01
0.35
207.8
200.0
-0.2
-0.1
211.3
211.3
0.0
0.0
08.7
88.6
0.1
0.1
95.4
95.2
0.2
0.2
548.5
540.0
•0.3
-0.1
607.9
607.5
0.4
0.1
160. 0
160.0
0.0
0.0
00.6
80.5
0.1
O.I
1.97
1.96
0.01
0.49
224.2
224.3
-0.1
-0.1
217.2
217.2
0.0
0.0
90.4
98.2
0.2
0.2
103.3
103.0
0.3
O.J
560.2
560.5
-0.3
0.0
635.4
634.9
0.5
0.1
17-1.3
174.2
0.0
II. 0
011.0
Gtl.7
0.1
(I.I
2.01
1.99
0.02
0.07
25J.2
253.2
0.0
0.0
244.7
244.7
.11.0
0.0
101.9
101.7
0.2
0.2
111.3
110.9
0.4
0.4
5IUI.3
5110.5
-0.2
0.0
6/0.0
660.5
0.5
0.1
III 1.0
103.6
0.3
0.1
%.b
96.3
0.2
11.2
1./2
1.69
0.04
2.11
2611.4
260.2
0.1
0.0
201.0
201.9
-0.1
0.0
9i.6
95.3
0.2
0.2
ll/.O
116.5
0.6
0.5
6(1 1. 2
601.4
-0.2
(1.0
K9/.2
69u.4
0.0
0.1
175.2
174.8
0.4
0.3
95.0
95.5
0.3
0.3
1.32
1.30
0.01
2.14
266.5
265.0
0.7
0.2
309.9
310.2
-0.3
-0.1
83.1
02.6
0.6
0.7
112.0
112.2
0.6
0.6
600.2
600.5
-0.3
-0.1
715.4
714.4
1.1
0.1
171.0
170.5
0.5
0.3
92.3
91.9
0.4
0.4
1.40
1.35
0.05
3. 05
266.4
266.1
0.3
0.1
308.8
309.1
-0.2
-0.1
06.9
06.6
0.4
0.4
114.6
113.0
0.0
0.7
605.4
606.0
-0.6
-0.1
735.1
733.9
1.1
0.2
179.9
179.0
0.9
0.5
97.3
96.6
0.7
0.7
1.114
1.77
o.ou
4.30
203. 9
202.6
1.3
0.5
323.1
323.3
-0.1
0.0
. 96.5
95.7
0.0
0.9
119.0
117.0
1.2
1.0
610.6
610.9
-0.3
-0.1
754. b
752.7
1.8
0.2
1 911.0
iim.o
1.2
0.6
1UI.5
100.7
0.0
0.0
1.77
1.70
0.07
4.40
297.9
296.1
1.9
0.6
330.1
330.3
-0.1
0.0
95. 8
94.8
1.0
1.1
123.6
122.1
1.6
1.3
620.4
620./
-0.4
-0.1
777.3
775.0
2.3
0.3
199.4
190.2
1.2
0.6
106.6
105.6
1.0
O.'J
1.82
1.75
0.00
4.45
307.0
305.0
2.0
0.7
340.5
348.6
0.0
0.0
103.2
102.2
1.0
1.0
131.1
129.2
1.0
1.4
633.0
633.5
-0.5
.0.1
(106.2
003.5
2.7
0.3
211.3
210.5
0.9
0.4
112.0
111.9
0.9
0.0
2.06
2.00
0.06
2.98
323.4
322.1
1.3
0.4
356.3
356.1
0.2
0.1
109.6
109.1
0.5
0.5
139.0
137.1
1.9
1.4
640.1
648.9
-0.0
-0.1
037.9
035.1
2.8
0.3
222.1
221.7
0.4
0.2
117.5
116.8
0.7
0.6
2.06
2.01
0.06
2.75
336.0
335.5
0.5
0.2
360.1
359.4
0.7
0.2
111.4
110.7
0.7
0.6
143.3
141.2
2.1
1.5
660.1
661.2
-1.2
•0.2
067. >
064.0
3.1
0.4
229.9
229. 0
0.2
0.1
119.0
119.1
0.7
0.6
2.09
2.04
0.05
2.69
344.7
344.4
0.3
0.1
371.7
370.6
1.1
0.3
114.2
113.3
0.8
0.7
148.3
146.0
2.4
1.6
672.4
673.8
-1.4
-0.2
U96.S
093.1
3.4
0.4
-------
Table 9 (Continued)
1970 1971 1972 19/3 19/4 I1)/!. 19/ft 19// 197U I'J/'I 19110 I'Jill I9M IUMJ 19(14 1905 19(16 19(17
Incomes
Disposable Income
HITIIDASE 695.3 751.8 810.4 914.9
OFFSET 695.3 751.4 009.7 913.5
DIFF 0.0 0.3 0.7 1.4
XOIFF 0.0 0.0 0.1 0.2
Real Disposable Income (79})
UITIIOASE 1221.7 1266.8 1317.3 1406.9
OFFSET 1221.7 1266.4 1316.7 1406.4
DIFF 0.0 0.4 0.5 0.4
XOIFF 0.0 0.0 0.0 0.0
Before-lax Corporate Profits
HITIIBASE 75.5 86.5 100.0 126.0
OFFSCT 75.5 06.1 100.0 124.7
OIFF 0.0 0.4 0.0 1.3
XOIFF 0.0 0.5 0.8 1.0
Aftertax Corporate Profits
WITIIBASE 41.3 49.0 59.1 76.8
OFFSET 41.3 48.8 58.6 76.0
DIFF 0.0 0.2 0.5 0.8
XD1FF • 0.0 0.5 0.8 1.0
Real Aftertax Profits (791)
WITIIBASE 76.5 86.7 100.6 125.2
OFFSET 76.5 06.3 99.9 124.2
DIFF 0.0 U.4 0.7 1.0
XI) IFF 0.0 0.5 0.7 0.8
Oilier Indicators
State & Local Gov't Gone! Rale (X)
UITIIOASE 6.12 5.22 5.1)4 5.00
OFFSET 6.12 5.22 5.04 4.99
nu'F o.oo -o.oi o.oo o.oi
XOIFF 0.00 -0.11 -0.09 0.11
Unemployment Rate (X)
UITIIUASE 5.0 6.0 5.6 4.0
OFFSET 5.0 6.0 5.6 4.9
DIFF 0.0 0.0 0.0 0.0
XOIFF 0.0 -0.2 -0.6 -0.6
Industrial Production Index (79*1.000)
HITIIUASE 0.707 0.71U 0.705 0.851
OFFSET 0.707 0.717 0.704 0.050
OIFF 0.000 0.001 0.002 0.002
XOIfF 0.000 0.140 0.211 0.193
999.0
996.8
2.2
0.2
1395.5
1395.4
0.1
0.0
136.9
135.6
1.3
1.0
85.3
84.5
0.8
0.9
125.5
124.8
0.0
0.6
5.UO
5.90
0.01
0.13
-5.6
5.6
0.0
-0.4
0.04U
O.U47
0.001
0.117
1096.7
1094.0
2.7
0.2
1423.4
1423.8
-0.4
0.0
132.1
131.0
1.1
0.8
01.5
00.9
0.6
0.8
105.0
105.4
0.4
0.4
6.43
6.41
0.02
0.27
8.5
8.5
0.0
-0.1
0.772
0.771
0.001
0.066
1195.1
1191.5
3.5
0.3
1474.6
1475.0
-0.3
0.0
166.2
165.0
1.2
0.7
102.4
101.7
0.7
0.7
127.1
126.8
0.3
0.3
b.66
5.65
0.01
0.25
7.7
7.7
0.0
-0.1
0.854
0.1154
0.001
0.064
1312.8
1308.3
4.5
0.3
1527.6
1528.0
-0.4
0.0
193.1
191.5
1.5
0.8
120.3
119.4
0.9
0.8
140. U
140.4
0.4
0.3
5.20
5.19
0.01
0.21
7.0
7.0
0.0
-0.2
0.906
0.9(15
0.001
0.10J
14(>4.U
1409.3
5.5
0.4
IS'JS.5
1595.0
-0.3
0.0
224.3
2;'2.4
1.9
0.9
1-10.9
1J9.0
1.2
0.8
153.0
152.5
0.5
0.3
b.52
5.52
0.01
0.11
6.0
6.0
0.0
-0.2
0.959
0.958
0.001
0.110
1644.2
16J5.8
(1.4
O.S
164J.9
164J.4
0.4
0.0
2!>li.2
2J.2.5
J.B
1.5
ltU.3
165.9
2.4
1.4
11,11.3
16/.0
1.3
0.0
5.93
5.93
0.00
-0.06
5.8
5.0
0.0
-0.5
i.noo
0.997
0.003
0.268
1824.9
1814.4
10.5
0.6
1654.9
1654.8
0.1
0.0
245.6
241.7
3.9
1.6
164.3
161.8
2.5
1.5
150.7
149.6
1.1
0.8
7.06
7.04
0.01
0.13
7.2
7.2
0.0
-0.6
0.963
0.960
0.003
0.319
2038.4
2025.1
13.3
0.7
16/2.2
1672.3
-0.2
0.0
230.7
226.0
4.7
2.1
152.1
149.1
3.0
2.0
128.5
• 127.1
1.3
1.1
0.76
8.76
0.01
0.09
7.8
7.8
0.0
-0.5
0.977
0.974
0.003
0.320
2303.8
2284.7
19.1
0.8
1723.4
1722.6
0.8
0.0
265.4
257.3
U.O
3.1
173.3
160.3
5.0
3.0
133.5
131.1
2.4
1.0
9.00
8.98
0.02
0.27
7.1
7.2
-0.1
-1.1
1.059
1.053
0.006
0.604
2580.6
2554.9
25.7
1.0
1766.6
1765.7
0.9
0.1
295.3
205.0
9.5
3.3
193.2
187.2
5.9
3.2
136.4
134.0
2.4
1.8
8.42
8.38
0.04
0.48
7.0
7.1
-0.1
-1.4
1.105
1.097
0.007
0.662
28UB.4
2854.8
33.6
1.2
1026.4
1025.7
0.7
0.0
313.2
302.5
10.7
3.5
206.0
199.3
6.7
3.4
134.3
132.0
2.3
1.7
8.08
8.02
0.06
0.69
7.0
7.1
-0.1
-1.4
1.153
1.146
0.007
0.640
3239.9
3196.6
43.3
1.4
1094.4
1894.4
0.0
0.0
391.4
3U0.6
10.8
2.B
254.4
247.5
6.9
2.8
152.7
151.4
1.3
0.9
U.42
8.35
0.07
0.78
6.5
6.6
-O.I
-1.2
1.229
1.224
0.006
0.459
3599.4
3546.3
. 53.0
1.5
1946.4
1947.1
-0.7
0.0
403.6
392.4
11.2
2.9
264.8
257.6
7.2
2.B
146.9
145.9
1.0
0.7
8.36
8.30
0.06
0.73
6.3
6.3
-0.1
-1.0
1.250
1.252
0.005
0.419
3987.1
3'J22.0
65. 1'
1.7
1998.8
1999.8
-1.0
0.0
433.2
419.4
13.0
3.3
285.1
276.2
8.8
3.2
146.7
145.5
1.2
0.8
8.00
0.02
0.06
0.73
6.2
6.3
-0.1
-1.1
1.29Z
1.2U6
0.006
0.488
-------
Table 10
Comparison of Alternative Simulations
Real GNP (Billions 79$)
Level in 1980
Level in 1987
Growth Rate 1970-1987
Implicit Price Deflator (1979=1)
Level in 1980
Level in 1987
Growth Rate 1970-1987
Unemployment Rate (%]
Level in 1980
Level in 1987
Business Fixed Investment
(Billions 79S)
Level in 1980
Level in 1987
With
Base Case
2414.6
2927.3
3.0
1.090
1.997
7.8
7.2
6.2
270.5
349.9
With
Holding
Money Supply
Constant
2411.2
2918.0
3.0
1.083
1.961
7.6
7.2
6.3
269.7
349.1
With
Hinh
Cost
2415.3
2930.5
J.O
1.090
2.000
7.8
7.2
«.2
270.5
350.5
With
Low
Cost
2414.6
2928.9
3.0
1.090
1.980
7.7
7.2
6.5
270.5
344.3
Without
2415.9
2949.1
3.1
1.059
1.860
7.3
7.5
6.7
268.4
349.0
------- |