Review

Long-range economic planning in the United States began in calendar 1975 with the preparation of the fiscal 1976 Federal budget. Since then, each budget document has included economic assumptions and budget projections for a five-year horizon. For example, the fiscal 1978 budget, for which estimates were first prepared in January 1977 and then revised in July 1977, includes assumptions and projections through 1982. The assumptions for the current year and the next are called “forecasts,” but beyond the next year the assumptions are labeled as “projections consistent with moving gradually toward relatively stable prices and maximum feasible employment.”

Legislation is being considered which would allow depository financial institutions throughout the nation to offer to households interest-paying checking accounts, more popularly known as NOW (Negotiable Order of Withdrawal) accounts. Bankers, in general, are concerned about the effects on earnings of such a regulatory change. Several studies of NOW accounts, however, suggest that this concern may be unjustified, as only small earnings effects have been detected in areas where NOW accounts are currently permitted.