Diverging Fortunes: US and Euro Area GDP

Euro area GDP continues to drop in Q1, while the US recovery accelerates.

Figure 1: US real GDP (blue), Euro Area 19 real GDP (red), both in logs, 2019Q4=0. Source: BEA, European Union, and author’s calculations.

The US recovery has benefited from a tremendous amount of fiscal stimulus and — finally — a reasonable pandemic response (including an effective vaccination rollout).

24 thoughts on “Diverging Fortunes: US and Euro Area GDP

  1. pgl

    “Euro area GDP continues to drop in Q1, while the US recovery accelerates.”

    So the Kevin Drum post I linked to got this right. And as I noted, this may explain in part why we are exporting less but importing more.

    Of course the mere mention of net exports by me is going to get JohnH yelling his usual canard that I have never mentioned the fact that we are importing more from China. Of course his claims about me are false, but they always give me a chuckle.

  2. Dilbert dogbert

    Does anyone remember the era when the Europeans used to lecture the US on it’s unsustainable debt?

    1. Moses Herzog

      It’s especially ironic when you toss in the fact, one of the very few accurate statements ever made by the orange abomination: That Germany, France, etc were getting a “free ride” on funding for NATO. This is one of the few 0.0000000000000000000001% of the statements he ever made that checked out as correct. So when you wave the naughty finger at the nation providing you with a large bulk of your personal safety, that one really kind of ranks as the double slap to the face of a friend. Which is why, other than donald trump strengthening Putin’s poker hand, I rather enjoyed watching France and their European pals squirm in their seats on that one. I cannot lie on that one, I rather secretly enjoyed it.

      1. Barkley Rosser


        Germany may have grounds to squirm, but France’s military spending at 1.86% of GDP is just under the 2% required NATO limit. They have a serious military with a substantial nuclear capability, and they use it a lot, being the main foreign nation involved with fighting al Qaeda and ISIS groups in various West African nations, most of these their former colonies. There was also a fairly long period during which they were not in NATO, when indeed de Gaulle took them out to emphasize French self-sufficiency and independence in foreign affairs, which was the period during which they started their nuclear “force de frappe.”

        Keep in mind that it was jealousy of the French with their major military parades on July 14 that set Trump off on wanting to have big ones in Washington on July 4. No, Trump was not in much of a position to lecture or sneer at the French. The NATO members most likely to be spending well under their supposedly required 2% of GDP are mostly the really small nations that basically have almost no militaries at all, ooh, shame on Luxemburg!

          1. Barkley Rosser

            Things have changed a lot since 1940, Moses. You seem not to be too well informed about the current situation, or even the last half century, although that is not particularly surprising.

          2. Moses Herzog

            @ Barkley Junior
            I’m counting on geriatrics in the Virginia area to update me. Your “update” on de Gaulle is extremely riveting. What’s this about “colonies”?? Does de Gaulle still wear the funny hat?? I only just joined in this modern terminology of yours, El Narcisista. Does France still have Putin shaking in his booties in Ukraine?? Obviously France’s peace efforts are working well in Africa. Keep us all informed Junior.



            https://www.france24.com/en/20160117-burkina-faso-foreigners-victims-death-toll-hotel-attack-french-canadians-american <—-just click "deny" after the link jump.

            Obviously the "nuclear capability" is literally killing it in Africa. Keep up your great terrorism region correspondence there Richard Engel Rosser.

            Can you confirm all the "progress" in Ukraine related to France's "nuclear capability" Barkley??
            “According to the Office of the United Nations High Commissioner for Human Rights, more than 13,000 people have lost their lives and 25,000 have been wounded since 2014. A total of 1.6 million people have been forced to flee their place of residence to other regions in Ukraine and approximately 1 million refugees have moved to bordering countries. Donbass has become one of the world’s most mine-filled zones, together with Afghanistan and Iraq.”

            Thanks to France for keeping things stable with their “nuclear capability” in both their former colonies and in Ukraine. Very impressive. How could anyone forget?? Well…….. not Barkley Junior certainly

          3. Barkley Rosser


            Sheesh, you are really seriously losing it here. What on earth does France have to do with Ukraine? Ukraine is not a member of NATO. France has zero obligations to defend Ukraine.

            If there is anybody who should be ashamed about what has gone down in Ukraine it is the US and UK. In 1998 there was the Budapest Agreement. It was signed by four nations, none of them France: Ukraine, Russia, US, and UK. It involved Ukraine giving up the nuclear weapons it held after the dissolution of the USSR. The US and UK promised to protect its “territorial integrity” and Russia promised to respect it in association with this act by Ukraine. None of those signatories kept their word, although I am sure we would not have seen Putin annexing Crimea if Ukraine had kept its nukes.

            You really should know better than to argue with me about anything having anything remotely to do with Russia, Moses.

          4. Moses Herzog

            @ Barkley Junior
            If you can’t connect the dots between the potential fall of the Ukraine to the threat of Russia towards European-wide defense security (FYI Mr. PhD, France is part of Europe), I’m afraid I don’t have the personal motivation to clean up the saliva off your chin at the seniors’ activity center Barkley.

        1. Ulenspiegel

          “Germany may have grounds to squirm, but France’s military spending at 1.86% of GDP is just under the 2% required NATO limit. ”

          There is no required NATO limit. BTW a financial argument without defining demand (capabilities) is stupid. You can pay a lot without getting much and you can pay less for more output.

          Define number of heavy brigades etc. for NATO Europe, then we could talk. It is funny that the USA with a relatively moderate contribution to the ground forces in central Europe during the cold war have reduced these relatively more than the Bundeswehr the German ground forces. The USA has 1 medium brigade left, a brigade that is according to US officers useless agianst Russia.

      2. Ulenspiegel

        “That Germany, France, etc were getting a “free ride” on funding for NATO. ”

        Please, do not confuse the funny things in your head with reality. Thanks!

        Get correct neumbers then come back and also try to understand that a lot of the US defense costs are not NATO related.

        1. Moses Herzog

          @ Ulenspiegel
          So you’re saying Germany would prefer the tens of thousands of American soldiers deployed in Germany be better placed elsewhere?? You may be interested to know a large percentage of American voters would be happy to oblige you on that wish. The “little green men” providing “self-defense” to Ukraine’s eastern border may come “to say hello” to Germany one day. Perhaps the eastern part of Germany would like to be annexed like Crimea?? If you miss the donald trump MAGA days, be sure to vote for German leaders who don’t want to pay for NATO and eventually you’ll have the ideal world you dream of. And perhaps no criticism from those across the Atlantic whose Air Force and Navy’s efforts have been such a tedious weight for you. Be sure to phone Rudolph Giuliani if things get chaotic, his “interests” in keeping currently democratic Europe safe know no bounds.

    2. Barkley Rosser

      I think that was mostly the Germans, not “the Europeans.” Some European nations have long had much higher debt/GDP ratios than the US. e.g. Italy.

      1. pgl

        The Germans lecture us on everything including how to produce beer. Never mind Kudlow’s nonsense complaint about us making plant based beer – American microbrew beers are a lot better than German lager.

        1. Not Trampis

          Yanks knowing how to brew beer. What a laugh. dutch produce better beers than Germans

        2. Moses Herzog

          America has Germany beat in microbrew beers……. WOW, that is “something” isn’t it???……… And as someone who enjoys beer occasionally that’s really something to be proud of. What I love about America in the year 2021, and really since the term “MAGA” was used by Ronald Reagan around 1980, is that we have our priorities so well defined, in a national sense. We are now better than Germany in microbrews. Wow, I’m getting tingles around my ……… thinking about America being the greatest in microbrews. Tingles, right, you know…… there.

        3. Ulenspiegel

          “American microbrew beers are a lot better than German lager”

          Apples with oranges comparison. Compare industrial products with industrial products and “artisans” products with “artisan” products, then we can talk. Yes, US mico brews are reallyx good.

          1. baffling

            i would argue there are very few large production beers that are “good”, no matter what country they come from. on the other hand, at least in the usa, in aggregate the micro brews are a pretty big part of our beer consumption-around a quarter of beer sales. not sure how that plays out in other parts of the world. i guess my point is that that “artisan” market is actually rather large in the usa.

  3. ltr


    August 4, 2014

    Real per capita Gross Domestic Product for China, United States and Euro Area, 2000-2019

    (Percent change)


    August 4, 2014

    Real per capita Gross Domestic Product for China, United States and Euro Area, 2000-2019

    (Indexed to 2000)

    [ Real per capita GDP grew at about the same rate in the European Union as in the United States between 2000 and 2019. Growth in the Euro Area was a little slower than in the US due almost entirely to structural difficulties in Italy and Greece. ]

  4. ltr


    January 30, 2018

    Government debt as a share of Gross Domestic Product for United States, Canada, France, Germany, Italy, Japan and United Kingdom, 2007-2019

    [ Debt share for the United States was 3rd highest among G7 nations in 2019, after Japan and Italy. ]

      1. Barkley Rosser

        More important are interest payments as percent of GDP than the debt/GDP ratio.

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