When the GDP is higher than the previous year’s GDP, it is said that the economy is improving. However, as a good economist, we still need to take note of other effects of the increased GDP particularly the value of import vs. export, the unemployment rate, inflation rate, the supply of money and others as it will also create economic failure in the long run.
Based on the economic report that was released by the U.S. Department of Commerce: Bureau of Economic Analysis, the GDP of the US back in January 2005 and 2006 is 12,455.8 and 13,246.6 respectively. (Bureau of Economic Analysis, 2007) (See Graph I – A Ten-year US GDP Linear Graph on page 11. Table I – A Five-Year Domestic GDP in the U.S. on page 4) Analyzing the graph below shows an upward trend. It means that during the past five years since the September 11 terrorist attack, the country managed to slowly recover from the economic disaster that has resulted from the attack. However, the ten-year linear graph does not give us a better picture of the U.S. economy. There are a lot of components that could affect the GDP of a country. Therefore, it is important for us to look at other macroeconomic tools that could give us a better understanding of the major factors that could affect the economy of a country as a whole.
There were three major economic events that directly affect the GDP of the U.S. between the years 1996 – 2006. A percent change in GDP graph can give us a more detailed historical economic outlook. It clearly shows how the U.S. economy was badly affected during the 1997 Asian Financial Crisis, the Mexican economic recession in 2000, and the September 11 tragedy in 2001. .
The Asian financial crisis in 1997 causes a lot of Asian economies to experience a great depreciation in the purchasing value of their currency. This is the main factor why most Asian countries were forced to cut down on their importation of commercial goods from the U.S. and other countries.