Government shutdown has not revived recession
Government shutdown has small impact on GDP growth by Alice Kantor As the government shutdown from Oct 1 st to Oct 17 th , federal funding stopped. This two-week drop in public funding had a negative impact on US economy. Direct effects are caused by the fact that civil servants’ pay and funds for industries were suspended. Therefore, public funding is expected to dip by 6.6% between the third and fourth quarter of 2013. This portion impacts the country’s added value, aka the GDP. Federal funding accounts for 4.5% of the GDP, according to Moody’s Analytics . Thus, the direct decrease in GDP growth is a 0.3 percentage point drop, as estimated by Macroeconomic Advisers . It means that, if the growth rate of the fourth quarter (Oct-Nov-Dec 2013) is 2.5%, it actually would have been 2.8%, had the government not shutdown. But the economy also indirectly suffered from the shutdown. Government workers (some 450 000 people), through the suspension of their pay