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The US economy is not stale, it is growing faster than Europe. I raise this comparison because the Euro block was the most similar thing to it in terms of devel

The US economy is not stale, it is growing faster than Europe. I raise this comparison because the Euro block was the most similar thing to it in terms of development for the past decade. Other emerging economies have been developing faster and their percentage of trade with the US may be decreasing, but I don't see any sign of the US stalling. “In 2008 the EU’s economy was somewhat larger than America’s: $16.2tn versus $14.7tn. By 2022, the US economy had grown to $25tn, whereas the EU and the UK together had only reached $19.8tn. America’s economy is now nearly one-third bigger. It is more than 50 per cent larger than the EU without the UK.” Source: https://www.ft.com/content/80ace07f-3acb-40cb-9960-8bb4a44fd8d9 https://www.ft.com/content/80ace07f-3acb-40cb-9960-8bb4a44fd...

jltsiren 3y ago
Comparisons based on nominal exchange rates are misleading, because the rates fluctuate a lot. The 2008 numbers in particular are not based on the strength of the EU economy but on the weakness of the US dollar during the financial crisis. Back then, €1 was worth $1.5 to $1.6 for a while, while the long-term average is closer to $1.2. And right now, the real year-on-year GDP growth rate in the EU is ~10% (when measured in US dollars), because the euro was particularly weak a year ago.
- JumpCrisscross 3y ago
  > right now, the real year-on-year GDP growth rate in the EU is ~10% (when measured in US dollars) I'm seeing this figure for '21 [1]. Not "right now." [1] https://www.macrotrends.net/countries/EUU/european-union/gdp-gross-domestic-product#:~:text=European%20Union%20gdp%20for%202021,a%201.8%25%20decline%20from%202018 https://www.macrotrends.net/countries/EUU/european-union/gdp....
  - jltsiren 3y ago
    The projected real GDP growth rate for the EU in 2023 is 1.0%, when measured in euros. Right now, €1 is about $1.1, while it was around $1.0 a year ago.
    - JumpCrisscross 3y ago
      > projected real GDP growth rate for the EU in 2023 is 1.0%, when measured in euros. Right now, €1 is about $1.1, while it was around $1.0 a year ago. Ah, I see the problem. 1% real GDP growth means €1 becomes €1.01. If, in the same time, €1 went from buying $1 to buying $1.1, then you--round trip--went from having €1 that buys $1 to €1.01 that buys $1.11. But! That $1 doesn't buy today what it bought one year ago. (The precise point of fudgery is when I say "€1 went from buying $1 to buying $1.1." We went from one 2022 € buying one 2022 $ to one 2023 € buying one 2023 $. We deflated the euro GDP but not the exchange rate.) TL; DR The EU is not experiencing double-digit real growth in dollar terms.
      - jltsiren 3y ago
        That 1% already the real GDP growth rate. Nominal growth is more like 6-7%, as inflation is a bit higher in the EU than in the US.
        JumpCrisscross 3y ago
        > 1% already the real GDP growth rate In Euros. The dollar was also losing real value in that time. You can't compare a real figure from one time period with nominal figures from another without doing some adjusting. (You're describing, in essence, a carry trade.)
        jltsiren 3y ago
        You earned €1 last year and €1.06 today. You could exchange that to $1 last year and $1.17 today. If US inflation is currently 3.1% and you go to the US, that money buys you 13% more than $1 last year. These numbers change from day to day, because exchange rates are full of effectively random noise. Of course, the real growth was only 1% and not 13%.

jltsiren 3y ago

Comparisons based on nominal exchange rates are misleading, because the rates fluctuate a lot. The 2008 numbers in particular are not based on the strength of the EU economy but on the weakness of the US dollar during the financial crisis. Back then, €1 was worth $1.5 to $1.6 for a while, while the long-term average is closer to $1.2. And right now, the real year-on-year GDP growth rate in the EU is ~10% (when measured in US dollars), because the euro was particularly weak a year ago.

JumpCrisscross 3y ago
> right now, the real year-on-year GDP growth rate in the EU is ~10% (when measured in US dollars) I'm seeing this figure for '21 [1]. Not "right now." [1] https://www.macrotrends.net/countries/EUU/european-union/gdp-gross-domestic-product#:~:text=European%20Union%20gdp%20for%202021,a%201.8%25%20decline%20from%202018 https://www.macrotrends.net/countries/EUU/european-union/gdp....
- jltsiren 3y ago
  The projected real GDP growth rate for the EU in 2023 is 1.0%, when measured in euros. Right now, €1 is about $1.1, while it was around $1.0 a year ago.
  - JumpCrisscross 3y ago
    > projected real GDP growth rate for the EU in 2023 is 1.0%, when measured in euros. Right now, €1 is about $1.1, while it was around $1.0 a year ago. Ah, I see the problem. 1% real GDP growth means €1 becomes €1.01. If, in the same time, €1 went from buying $1 to buying $1.1, then you--round trip--went from having €1 that buys $1 to €1.01 that buys $1.11. But! That $1 doesn't buy today what it bought one year ago. (The precise point of fudgery is when I say "€1 went from buying $1 to buying $1.1." We went from one 2022 € buying one 2022 $ to one 2023 € buying one 2023 $. We deflated the euro GDP but not the exchange rate.) TL; DR The EU is not experiencing double-digit real growth in dollar terms.
    - jltsiren 3y ago
      That 1% already the real GDP growth rate. Nominal growth is more like 6-7%, as inflation is a bit higher in the EU than in the US.
      - JumpCrisscross 3y ago
        > 1% already the real GDP growth rate In Euros. The dollar was also losing real value in that time. You can't compare a real figure from one time period with nominal figures from another without doing some adjusting. (You're describing, in essence, a carry trade.)
        jltsiren 3y ago
        You earned €1 last year and €1.06 today. You could exchange that to $1 last year and $1.17 today. If US inflation is currently 3.1% and you go to the US, that money buys you 13% more than $1 last year. These numbers change from day to day, because exchange rates are full of effectively random noise. Of course, the real growth was only 1% and not 13%.