Oxford Economics: Trump presidency could cost US economy $1 trillion

[TomCADem]

Source: Reuters

LONDON, Sept 13 (Reuters) - The U.S. economy could be $1 trillion smaller than otherwise expected in 2021 if Republican candidate Donald Trump wins the presidential election in November, economics research firm Oxford Economics said on Tuesday.

While the firm said Trump's policies - including more protectionist trade measures, tax cuts and mass deportation of illegal immigrants - may be watered down in negotiations with Congress, they could have "adverse" consequences.

​​​​​"Should Mr. Trump prove more successful in achieving adoption of his policies, the consequences could be far-reaching - knocking 5 percent off the level of U.S. GDP relative to baseline and undermining the anticipated recovery in global growth," it said.

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Under its baseline scenario, Oxford Economics expects U.S. gross domestic product - the value of all goods and services produced in the economy - to grow at a fairly constant rate of around 2 percent from 2017, reaching $18.5 trillion in 2021.

Read more: http://www.reuters.com/article/us-usa-election-trump-economy-idUSKCN11J25M

[forest444]

1. An excellent and timely estimate by our friends at Oxford.

Although I take it that when they project that U.S. GDP will "grow at a fairly constant rate of around 2% from 2017, reaching $18.5 trillion in 2021" they must mean in constant 2009 dollars (the current benchmark).

In current dollars, GDP way reach $18.5 trillion this year (the annualized rate for the 2nd quarter was already $18.437 trillion). If, knock wood, the economy grows at an average of 2% a year in real terms for the next five years, and if GDP prices rise by an average of 2%, we'll be looking at a $22.5 trillion economy by 2021.