Comparative performance of the American and European economies over the last 10 years
- Its development over the years
- It economic policy
According to the figures provided by the OECD (Economic Outlook in the OECD, vol.2007, No. 81, June 07), the indicators tell us that since 1997, the growth rate of GDP in Europe, has been higher than the United States, despite a slowing US economy in 2000 and 2001 (GDP growth fell to less than 0.5% during the year 2001). In 2002, GDP per capita in the US, calculated according to purchasing power parity, was 39% higher than the EU average which was at 15%. Potential growth (without inflation risk) may reach 3.5% in the US against 2% in Europe. The European unemployment rate is higher than the US unemployment rate. Inflation, although slightly higher than the US, is equivalent to the global one.
Finally, the balance of trade which is stable in Europe, however, is unbalanced in the United States, with a deficit to 7% of its GDP (approximately $ 800 billion and 1.5% of world GDP). This deficit is explained by the dollar fluctuations that resulted in the loss of price competitiveness of U.S. exports in the 1990s compared to imports. The balance of payment deficit is also manifest in the United States because of the imbalance between savings and investment, the savings rate of American households having fallen to 1.5% of disposable income in 2005. However, the fascination with the dollar for investors facilitates the use of external financing and the U.S. economy is ahead because it is more efficient in terms of growth and full employment.
Tags: American economy, dollar fluctuations, European trade deficit