The very slow European recovery

The German economy is only about five percent bigger today than in 2008.  And they are usually considered one of the winners.

In Finland gdp has shrunk in eight out of the last twelve quarters.

Output in France, Italy, Netherlands, and Austria is just barely growing.

And that is with a lot of QE (more than a trillion), a weaker euro, and a favorable oil price shock.

Overall the eurozone economies are one percent smaller than they were in 2008.


"And that is with . . . a weaker euro . . . " I suspect Scott Sumner would say this is an example of "reasoning from a price change."

Well it isn't because Cowen is predicting anything simply acknowledging what's baked into the cake already.

I think Sumner is the closest thing the modern world has to a witch doctor/shaman and even I know that. Bone up on the topic.

@Matt Buckalew - right you are! I even called Sumner a witch-doctor (in French, using Bing Translator) the other day. Here's my post from today on his blog, exposing his hypocrisy, it's self-explanatory. The one thing I do admire about Sumner is that he attacks all commentators he disagrees with on his blog; imagine Krugman doing that, or Delong).

Sumner: “And the countries that had the closest to NGDPLT during the Global Recession (Australia, Israel, etc.) did best.” and later: “Ray, No country has been practicing NGDPLT, as you would understand if you knew how to read.”

Wow, that’s metaphysics. Double wow. Tyler Cowen is right about macroeconomics in his podcast at “Maker Stories”, it’s more art than science. You’re an artist.

But Sumner you’re a dishonest artist. Like I said about a ‘true Communist’, you will never concede that NGDPLT has ever been practiced correctly. That’s dishonest. You’re a fraud. If I stop posting here, you’ll know why. You’ve reached the end of the road for me, nothing you say excites me. You’re about as honest as Eric Hobsbawm, CH, FBA, FRSL (9 June 1917 – 1 October 2012), a British Marxist historian of the rise of industrial capitalism. He was a Stalin apologist, that’s how strongly he viewed the world through his ideological lens. Sound familiar?

Don't know about reasoning from a price change, but "a lot of QE" can be a sign that the ECB has been too tight, as is a prolonged period of low interest rates.

Exactly. They may have done "a lot of QE," (though what's a lot?) but nevertheless CPI growth has averaged 1.2% since 2008, at a time when if anything they ought to have been exceeding their LR inflation target. They haven't had expansionary monetary policy during this period. Quite the opposite, in fact.

So Europe has its Japan stage now. It has hit the demogrphic spiral down.

And it will probably result in the same dramatic decline in living standards that Japan experienced. The African migrants will soon be looking to Russia or Saudia Arabia to escape poverty.

is this trolling? Well good luck with that ...I still think they will continue to come to EU/US.

It's not really demographics: Spain was going through major demographic changes, going towards youth, thanks to a very lax immigration policy... but the crisis smacked the country about as hard as anyone else.

The main reason for the problem? Monetary policy,

LOL. "We just didn't print up enough money for all these people!"

Cargo cult thinking.

Typical American lack of data knowledge

I don't know that lack of data knowledge is a particularly American phenomenon, but your link makes a compelling point.

I think it's you that are lacking in your ability to interpret the data. Your linked slide normalizes to 2003 levels=100. Tyler's post explicitly emphatically references the European recovery, and even explicitly mentions the 2008 levels as the baseline for post-crisis performance. Extrapolate from your own source and its shows that the US has out-performed both Germany and the Eurozone in the recovery time period (and that doesn't even include 2014 and 2015 when the US has massively outperformed).

The reason Germany is such a positive outlier on the chart is solely due to its superior pre-crisis (2003-2008) performance. This says nothing about the point that Tyler's making, and in fact may even support it. Robust Eurozone growth appears possible only during unsustainable global credit bubbles.

On the graph, German GDP went up about 15% between 2008 and 2013. Extrapolating to 2015 gets us something like 20%.

That's all in PPP. Add in Tyler's 5% number and we merely learn what we already knew: the Euro has gone down relative to the Dolar.

The opposite is the case.

The graph does not normalize to 2003. At the time the analysis was done, there were no final confirmed IMF data for 2014, and you speculate with the year 2015, which is not even finished yet. The fit is to all the last 10 years available without taking a special year 2008 as starting point. And it compares to the US and UK to put things into proper perspective, namely that the UK is underperfoming, the US not outperforming, but Germany is

Using the relevant GDP per capita in PPP data with 1.32 for 2013 vs 2008 with 1.1.7, that has grown by 13% and not the 5% claimed by the qz pamphlet. Your claim that this only before 2008 is therefore false too.

And Germany achieved that without any credit bubbles

Who the hell do you think funded the houses and apartments built in Ireland and Spain? The tooth fairy? Well done Germany - for the third time in one hundred years you have brought all of Europe to her knees! With the creation of tier one and tier two capitol you have recreated the gold standard, which gave us the Great Depression in the thirties.
Oh, and please send your idiotic finance minister a message - low interest rates are NOT a sign of easy money, just the opposite.

Who was responsible for issuing mortgages, supervises that, and set the rules ?

like page 117 ?

National Governments, banking supervision, and banks, in Ireland and Spain,
and not Germany or even the ECB.

But of course some sociopath, who want to steal from their neighbors try to justify this with anti-German racist hatemongering.

Angela Merkel and Wolfgang Schäuble enjoy record historic popularity for their outstanding policies.

Imagine if all European countries had done the Hartz labor reforms like Germany did!

The PPP adjustment is doing a lot of work there. Just looking at GDP per capita, Germany is up just over 6% since the end of 2007 (IMF numbers). Eurostat's PPP-adjusted GDP per capita is up just under 7% over the same period. Is there some reason to think the purchasing power of the Euro increased so much during a period when it depreciated by over 30% against the dollar?

Yes the euro weakness may be endogenous. Demography matters but doesn't kick in this discretely.

Basically two competing explanations.

The left says its austerity.

The right says the endemic weaker schlerotic more statist European economies much less capable of dealing with shock like 2007-8 than USA even if was mostly the USA's shock.

I am (probably obviously) in latter camp but this is the relevant battleground.

Of course, annoyingly, they aren't mutually exclusive. We all want 100/0 victories when 75/25 generally more likely to be true and much harder to detect/prove.

NGDP has barely risen in the eurozone in that timeframe[1] so any growth is pretty much a miracle. The ECB has chosen that policy, so whether they've done "a lot of QE" is neither here nor there.

Printing presses and open borders laying the foundation for a gold-paved streets future.

Not open borders. The euro people obviously haven't fully deployed their presses and are suffering because of it.

Money supply is the last great centrally planned area of our economy, which is a shame because it is so important. There is an optimal money growth path and we rely on our central banks to choose and execute that path. Sometimes that means loosening (which is equivalent to money printing) and sometimes it means tightening.

Nobody really knows the optimal path, but mocking the concept of loosening itself is the height of foolishness. Whatever you think about the current situation, all else being equal it's going to be best to tighten sometimes (e.g. the 1970's) and best to loosen other times (e.g. the 1930's).

So you dismiss that NGDP might be low because of the RGDP part totally?

Just roll the presses?


NGDP growth is whatever the central bank wants it to be. It can't be low "because of" low RGDP growth. It's low because of the ECB.

"In Finland gdp has shrunk in eight out of the last twelve quarters."

-In Finland, the oil price shock is unfavorable, due to the Russian recession.

How does this compare to growth of non-EZ European economies?

This post has been up for 5 hours and there are no comments about immigration yet?

Immigrants in Scandinavia are making use of direct action to save us all from a plague of twee

Tabarrock has set the spam filters to exclude links news stories unflattering to certain clientele. So, tune in to Blazingcatfur

For some contrast to other countries, US GDP is up over 18% since 2008. China's GDP has doubled. South Korea is up about 30%. Brazil and India are up about 40%. Even Russia is up about 25%.

Japan is down 4%, which is Europe's only consolation.

Europe does not compare itself to China or India, which are developing countries where the Party tells you what to do, and where some people live beside open pools of their own sewage, respectively. There aren't that many people in Europe who can embody economic growth by moving up from a bowl of rice a day.

5) "unless, for some reason, firms consistently pick the moment of a minimum wage increase to inflate their markups."

Isn't this plausible? Couldn't firms use the minimum wage hike as a justification for the rise that customers might buy?

"Isn’t this plausible?"

Are you saying is that firms profitability would go up after a minimum wage hike? That hasn't historically happened. We've had plenty of minimum wage hikes post WW2 and the evidence doesn't suggest any long lasting change to corporate profitability post MW hike.

So, no, it's not really likely.

(1) Bureaucratic overkill, which makes business hell on the Earth;
(2) Onerous tax burden, especially labour (income + payroll tax) and VAT.

It's that simple.

Does this mean that trade surpluses aren't the elixir they are supposed to be? The Eurozone is setting records for trade surpluses (the U.K. and the U.S. are the largest Eurozone trading partners), yet as the U.S. economy grows (modestly) the Eurozone economy languishes. Paradoxically (?), the U.S. media have been fixated on the growing U.S. trade deficit with the Eurozone (and the rising dollar relative to the Euro). Cowen has noted the re-industrialization of parts of the U.S. economy, as industries that had moved overseas (auto manufacturing, textiles, etc.) are now moving back to the U.S., which could further weaken economies whose success is so dependent on trade (surpluses) with the U.S. If trade surpluses aren't the magic elixir, does that mean that the Eurozone must concentrate on expanding domestic (in the Eurozone) trade (i.e., aggregate demand)?

Yet Europe continues to win in quality-of-life and almost nil crime rates measures across the board. Here's a thought experiment: Texas or Germany, where would most people like to visit AND choose to live?

No clue who gave you the idea that Europe has 'almost nil crime rates'. European countries have low murder rates, not low rates of property crime or assault. If you compare the English countryside to small town and rural New York the murder rates are not all that different. Our elevated rates of violent crime are not entirely attributable to activity in slums, but they are largely attributable to that.

While were at it, comparing Office of National Statistics date from Britain with FBI date and BJS data from the United States, the following applies:

(1) Robbery in the U.S. is 1.35x than the England-and-Wales metric (per Uniform Crime Reports) or 2.5x (per Victimization Survey).

(2) The stated frequency of domestic burglary in England-and-Wales exceeds that of all burglary in the United States by a factor of 1.3 (per surveys) or a factor of 2.0 (per reports).

(3) The stated frequency of motor vehicle theft in England-and-Wales exceeds that in the United States 7-fold (on which reports and surveys agree, more or less).

Cherry picking some UK statistics. I wonder how any place in Europe would compare with New Orleans, Houston, Dallas-Ft Worth, Killeen, etc...

No, they are not cherry-picked. It's an English-language country with readily available statistics. The level of urbanization is not much different than in this country and you've got a field for statistical collection of 53 million people. Ulster and Scotland are excluded (and are marginally more rural than England and Wales). British homicide rates are around about the European mean, so it's not manifestly and outlier.

So property crime or violent crime...what's worse, or are they equal?

I think the point is that the EU is worse on both. It's just the US has a higher murder rate and that gets the bulk of the media attention.

"The EU has a violent crime rate nearly a third higher than the United States. At this point we can say, assuming my data is in the ball park, that while the US has a murder rate far higher than the EU it has lower instances of other violent crimes relative to the European nations."

Murder is an minor footnote in statistics I guess.

American families have to get accustomed to the quantity of random mass shootings at movie theaters, elementary schools, high schools, churches, gyms, universities, work places, military installations etc..

No, it is not. Neither does it exhaust security threats that people experience.

You do realize that average popoulation densities make the USA seem like a depopulated Mad Max-like wasteland if compared to Europe, right?

That depends on what you're looking for in terms of climate and scenery.

You might refrain from rigging the choice by cherry-picking Germany, which has employment-to-population ratios which are fairly high in context and unemployment rates which are fairly low. Germany is the only Euro-Area country with an unemployment rate below that of the United States, and the Euro-Area mean of 11.1% is more than double that of the United States at 5.3%, and the ratio of employed persons to total population (at 0.46) also higher than Euro-Area means (0.44). The U.S. is more affluent than any European country bar Switzerland, Norway, and a couple of postage stamps. We also reproduce in this country, which they cannot be bothered to do in Europe bar in Ireland, Britain, and France.

So 'Obummer's' economy is actually successful? How refreshing.

Well, let's see.

172,000 European immigrants have moved to Texas.

I can't find any information about a Texan moving to Europe.

"Here’s a thought experiment: Texas or Germany, where would most people like to visit AND choose to live?"

I wonder if it ever occurred to jk to look at the immigration stats. It's also noteworthy that Germany made up the largest group of immigrants from Europe at the 1990 census.

I knew an urban geographer who conducted a study of Toronto housing markets ca. 1962. Lots of German immigration at that time. The reason, he tells me, was chronic housing shortages in Germany. Germans were emigrating in order to be able to start families.

Wow, your anecdotal 1960s immigration story is very..irrelevant.

Stuck in the 90s with your statistics. Things have changed. Have you or Art Deco or one of his many personas actually been to Europe?

That was the most recent Census data I could easily find that broke down country of origin to destination US state. If you actually have a more recent source that contradicts it feel free to share. Otherwise, data talks and bullshit remains bullshit.

No, the crime statistics are from 2010, 2013, and 2014. The labor market statistics are from 2014 and 2015.

An estimated 8.7 million U.S. citizens live overseas and U.S. citizens take more than 80
million trips abroad every yearso Texas is not a utopia as is claimed:

The US is also unappealing relative to the other high migration countries The U.S. has a PNMI of 60% (potential net migration index” subtracts the number of adults who would move out of a country from the number of adults who would choose to move to that same country, and presents it as a percentage of the total adult population), less than a quarter of top-ranked Singapore’s 260%. Other countries that rank higher than the U.S. include New Zealand (175%), Canada, (170%), Australia (145%), France (70%) and the EUROPEAN U.K. (65%)

But then again that PNMI stat was done right after GWB's reign of terror, so maybe it's different now.

"An estimated 8.7 million U.S. citizens live overseas and U.S. citizens take more than 80 million trips abroad every yearso Texas is not a utopia as is claimed:"

No one claimed that Texas was a utopia. You made a questionable assertion and 3 different posters provided data indicating that your assertion was probably wrong.


"Yet Europe continues to win in quality-of-life and almost nil crime rates measures across the board."

You didn't define quality-of-life, but it's clearly a subjective measurement. However, the "Europe has nil crime rates measures across the board." is wrong and I've posted links proving it's wrong.

"Here’s a thought experiment: Texas or Germany, where would most people like to visit AND choose to live?"

We have no idea where most people would choose to live, but if you measure immigrants from Germany to Texas versus immigrants from Texas to Germany, it's pretty clear that more people choose Texas as their final destination.

So some areas of Europe are bad...are some parts of US even more dangerous to point you have a higher chance of getting murdered or involved in a mass shooting?

Can anyone name someplace in Europe (other than in the UK) where they would not be in the night? I can give a litany of places in the US.

Do you have to worry more about murders or mass shootings in the US or Europe? I wonder if that aspect is more heavily weighted than GDP? You know..odds of getting murdered?

Well, I guess you did get to the crux of the problem. What is the definition of Quality of Life? I think not having a high probability of getting murdered is a large one.

But here you go, Quality of life rankings, have fun them, get angry with the methodology all day, Art Deco(s), don't see the US in the top 10 in most of these but see many European nations:

Should have wrote nil (relative to the triple to quadruple digit) violent crime rate in Murica.

Violent crime rate per year per 100K (2009):

EU - 5.8K US- 3.6K

"Having normalized the data we still see that there is a significant difference between the European Union and the US. The EU has a violent crime rate nearly a third higher than the United States."

That's what the data actually says, assuming you are interested in the actual data.

So US' 4.7 murders per 100k vs. ~1.0 per 100k is not something to be proud of?

Once again, murder is an irrelevant statistic when comparing Europe with the US since the US is almost 5 orders of magnitude higher, competing with the third world in terms of safety. You still have the right to high powered rifles with high capacity magazines at least.

"since the US is almost 5 orders of magnitude higher,"

I don't think you have a firm grasp on math.

The group of developed countries considered here has an average homicide rate below 0.8 per 100,000, with the exception
of the United States, which in the last five years has had an average homicide rate of 4.9 per 100,000 population.
(UNODC Homicide Statistics (2013)).

Yeah, should have wrote that the US has murder rates 500% higher than the average developed country.

First you asserted that Europe was a land of no crime. It is pointed out to you that not only is that not true, important categories of crime (used in this country to construct general crime indices are worse in Europe, notably in England and Wales. Other categories are worse here, but not so much worse that you'd say there was a radical difference in the quality of life, as the distinction between Britain and the United States is less than common state to state variation in the U.S. Now your fixating on the homicide rate. That's an important category of crime, but it does not exhaust security threats, especially outside the slums, where homicides tend to be the result of domestic disputes.

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