Lafayette College Economics Professor Delivers Economic Outlook
By Colin McEvoy on October 13, 2016
A Lafayette College economics professor and co-founder of a Bethlehem-based community bank consulting firm was the guest speaker at an economic outlook presentation held earlier this week.
Edmond J. Seifried spoke to a crowd of more than 100 people on Oct. 11 at the Mahoning Valley Country Club in Lehighton, where he discussed interest rates, the national gross domestic product (GDP), and predicted that the United States will experience stronger economic growth in 2017.
To illustrate why growth rates matters, Seifried pointed out that with 0.50 percent annual growth in GDP per capita per year, cumulative growth nation-wide grows by 20 percent. But if the GDP grows 1 percent, that number jumps to 64 percent. At 2 percent, it increases further to 169 percent.
“Think of your daughter,” Seifried said, pointing to a woman and little girl in the crowd. “If our GDP per capita only grows by half of 1 percent, after her work life is over, her life will be only 28 percent better than ours is today. But if we can get the economy to grow 2 percent, her life will be 169 percent better. You can imagine what 2.5 percent, or 3 percent, or 3.5 percent can do. That’s why this is important.”
Seifried is a professor emeritus of economics and business at Lafayette College and the co-chairman of Seifried & Brew. He had advised directors and CEOs of community banks across the nation, is noted for his keynote speeches, and has led the educational programs as Dean for the West Virginia Banking School and the Virginia School of Banking.
The overall U.S. GDP is currently $18.4 trillion, Seifried said, making it the largest economy in the world. The next-highest economy is China, which is $11.4 trillion. After that, the numbers drop significantly, with Japan at $4.2 trillion, followed by Germany at $3.8 trillion.
Comparing the economies of the United States and China, Seifried said that the U.S. GDP per capita is $55,080, compared to $14,107 in China. He also noted the United States has 809 vehicles per 1,000 people compared to China’s 34, and that the U.S. has 245 colleges and universities ranked in the top 1,000, compared to 95 in China.
“Will China replace the U.S. as the number one economy in the world?” Seifried said. “The answer is no, not in the next 10 or 20 years, because the U.S. has a strong middle class and a strong infrastructure.”
The Lehigh Valley regional GDP reached a record-high $37 billion as of 2015, according to a recent analysis by the Lehigh Valley Economic Development Corporation (LVEDC), ranking 73rd out of the 382 largest metropolitan statistical areas in the United States. That’s larger than the GDP of 97 other countries in the world and the entire state of Vermont ($30.4 billion).
Seifried said interest rates need to “hover around 3 percent” to keep the economy strong. If America were to fall into another recession, he said, interest rates would need to incentivize consumer spending and business growth to revitalize the economy again.
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