Professor Mark J. Perry's Blog for Economics and Finance
The chart above shows real GDP per capita from 1969 to 2009 for the EU-15 and the USA, using data from the USDA. The chart below displays the difference in real GDP per capita between the USA and the EU-15 over the same period, and shows that the USA-EU difference has more than doubled, from $4,000 as recently as 1982 to more than $8,000 by 1999, and has been as high as $8,794 in 2005. For 2009, the difference in per capita real GDP was $8,236 (US $41,646 - EU $33,410).
Dr. Mark J. Perry is a professor of economics and finance in the School of Management at the Flint campus of the University of Michigan. Perry holds two graduate degrees in economics (M.A. and Ph.D.) from George Mason University near Washington, D.C. In addition, he holds an MBA degree in finance from the Curtis L. Carlson School of Management at the University of Minnesota. In addition to a faculty appointment at the University of Michigan-Flint, Perry is also a visiting scholar at The American Enterprise Institute in Washington, D.C.
5 Comments:
According to your graph, in 1969, the EU-15 had 16/21 = 76% of US GDP.
In the year 1982, the EUs best relative year, it had 21/25 = 84% of US GDP.
Currently, the EU has 34/42 = 81% of US GDP.
So, not much happens - I'd say the EU-15 GDP seems to oscillate around 80% of US GDP.
The increases in real GDP per capita of the U.S. and the E.U were roughly parallel in the 1970s (because the difference was basically flat between $4,000 and $5,000, from 1969-82, which was one of the worst U.S. economic periods).
However, from 1982-09, the U.S. difference in the increase in real GDP per capita compared to the E.U. more than doubled, while it seems E.U. real GDP per capita continued to increase roughly at the same rate as the U.S. rate in the 1970s.
Also, I may add, given the U.S. consumed much more than produced, in the '80s, '90s, and '00s, other countries GDPs were raised at the expense of U.S. GDP (since exports increase GDP and imports decrease GDP).
The U.S. has been the main engine of global economic growth. I suspect, the E.U. would fall into recession if it attempted to pull the rest of the world's economies, similar to the U.S.
It was remarkable U.S. GDP was able to expand in the 2000s, given the large increases in U.S. trade deficits (U.S. current account deficits were 4% to 6% of GDP in 2000-08).
Not to mention that Europeans tend to work less and less? We CHOOSE to spend more and more time on vacations - or with our families and friends.
As an example, one cannot compare standard of living between EU and US by comparing GDP per capita alone.
People in US work much longer hours, barely enjoy vacations or parental leave, just to name a few. Many choose not to retire at all, in most cases it's not even option (heavy in debt, lack of social safety nets).
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