Europe versus America

Résumé du document

There exists a wide gap between European and American economies. The GDP, GDP per capita as well as productivity levels are much higher in the US than in Europe. These figures show the extent of American dynamism which cannot be denied. And after the 9/11 events, many felt that the American economy would enter into a recession. Though the statistics prove the contrary, the official figures are slightly biased in favor of the US, due to several factors. Among them, the difference in the methods of calculation is one. Making a comparison between Europe and the US has always been very interesting because one could say that the two continents are certainly the most powerful in the world. So, the two economies and their figures have to be analyzed carefully because they may not be very objective or subtle to consider.

Extraits

[...] So, first, we will tell you about the gaps that appear between the European and the American economies. And then, we will try to explain why there are such gaps and also if they really give an objective idea of the differences between the USA and Europe. We have based our research on an article published on the 19th of June 2004 in The Economist which is called “Mirror, mirror on the wall”. We have also based our research on a report made by the French Department of Economy and Exchequer called The growth and productivity gaps between the USA and Europe Finally, we have also used a report named EU versus USA which was published by Frederick Bergstöm and Robert Gidehag for the think tank Timbro. [...]

[...] - The productivity rate to see if the country is efficient. These three values have been used recently to draw a comparison between the performance of the USA and Europe and showed the following results: 1. In 2002, the level of the gross domestic product per capita in Europe was lower than in the USA. This result was given by comparing the two purchasing powers In 2002 in Europe, the productivity level in terms of time was lower than in the USA From 1993 to 2003, in the USA, the growth of the gross domestic product was one point higher than in Europe; that is to say in the USA compared to in Europe During the last ten months, the growth of the gross domestic product per capita was a bit superior in the USA than in Europe that is to say in the USA and in Europe During the same length of time, the growth of the productivity level in terms of time was a bit superior in the USA than in Europe with a year in the USA and a year in Europe. [...]

[...] The Americans and the Europeans use the difference between the interests they have received and the interests they have paid in order to estimate the production of services delivered by the banks. Using official statistics can be like comparing apples with pears, because of differences in the way that GDP is measured in different countries. For example, American statisticians count firms' spending on computer software as investment, so it contributes to GDP. In Europe, it is generally counted as a current expense and so is excluded from final output. As a result, the surge in software spending has inflated America's growth relative to Europe's. Finally, the authors of “Europe vs. [...]

[...] All those elements encourage the American GNP. Moreover the USA benefit from additional workforce every year. This workforce allows the country to increase its production and thus its growth rate thanks to a higher national demand. So the main macroeconomic aggregates take the demographic dynamism into account, that is why economic dynamism seems higher in the USA than in Europe. As a conclusion So as a conclusion, one could say that figures show a real gap between European and American economies. [...]

[...] Second Part : A theory and figures which can be criticised Different ways of calculation These gaps are very interesting to study and really show Europe's backwardness compared to the USA. Yet, this theory can be interpreted differently . In fact, the measurements are made differently in Europe and in the USA. This may be responsible for a misinterpretation of the results. The different ways of calculation concerning some operations often disrupt the comparisons between the levels and the evolutions. [...]