The Midyear 1952 Economic
Review
A Report to the President
By the
COUNCIL OF ECONOMIC ADVISERS
LETTER OF TRANSMITTAL
COUNCIL OF ECONOMIC ADVISERS,
Washington, D. C.y July 16,1952.
The PRESIDENT:
SIR: The Council of Economic Advisers herewith submits a report, The
Midyear 1952 Economic Review, in accordance with section 4 (c) (2)
of the Employment Act of 1946.
Respectfully,
' . f
Chairman.
Contents
Page
I. DEVELOPMENTS DURING THE FIRST HALF OF 1952
29
The economy in general
29
The security build-up
29
Production and employment
34
Economic stability
39
Trends within major sectors
47
Consumers
47
Business
51
Government fiscal operations
60
International developments
66
II. THE NEAR-TERM OUTLOOK
74
Government spending and fiscal operations
75
The security program
75
Deficit
financing
77
Nongovernment demand
79
Investment
79
Personal consumption expenditures
80
Personal saving
80
Foreign demand for United States products
82
Implications of the steel stoppage
83
The inflationary bias of the near-term outlook
84
III. IMMEDIATE POLICY ISSUES
86
The feasibility of the national security program
86
Stabilization policies
90
Fiscal policy
90
Credit policy
94
Price and wage stabilization
95
International economic policy
97
IV. THE LONGER-RANGE PROSPECTS FOR STABILITY AND GROWTH. .
100
Significance of experience from World War II to Korea..
101
The period from 1944 to 1946
101
The period from 1946 to mid-1950
105
Stabilizers built into our institutions
109
The 1944-50 record summarized
110
The problem ahead
112
Basic demand prospects
113
Available private policies
118
Available public policies
118
The factor of confidence
120
209722r—52
3
27
Pagf
APPENDIXES
123
A. The Nation's economic accounts
,
123
B. Statistical tables relating to employment, production, and
purchasing power
137
LIST OF TEXT TABLES AND CHARTS
187
28
I. Developments During the First Half of
1952
THE ECONOMY IN GENERAL
ANNALISTS of the first half of 1952 could accent any one of several
characteristics as its most