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The periodic trumpeting of superior US economic statistics by the English speaking economic news feeds used to have a slightly depressing impact on my mood, until I read an article dissecting the European figures versus the US ones in an article in the July 2004 edition of The Economist (unfortunately pay-to-view). The conclusion of the article was that the economic performance of the euro zone and the US has not been hugely different over the last decade.

According to the article:

The euro zone's GDP growth is consistently below the US but adjusted for population growth in the 10 years to 2003, average GDP growth per capita was 2.1% in the US vs. 1.8% in Europe (and excluding Germany, struggling with the consequence of the reunification, the figure would have been 2.1%).

After adjustments to make the figures comparable, average labour-productivity growth over the same 10-year period has been virtually the same, despite the US productivity miracle claims.

And if it is true that GDP per capita at purchasing power parity remains 30% below the US, the difference results mostly from more worked hours in the US. Europeans have used some of their increase in productivity to expand their leisure rather than their income. The average American works 40% more hours during his life-time than the average European.
"Who is better off?" says the article.

by Minstrel on Thu Jun 30th, 2005 at 10:01:17 AM EST

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