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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 t

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%.

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%.