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Economic developments in the euro area and in the United States in 2020

Author

Listed:
  • Andersson, Malin
  • Checherita-Westphal, Cristina
  • Gomez-Salvador, Ramon
  • Henkel, Lukas
  • Mohr, Matthias

Abstract

This box compares the economic performance of the euro area and the United States during 2020. While it is not yet possible to assess the long-term impact of the coronavirus (COVID-19) pandemic, it is interesting to take stock of the economic developments that have led to the worst loss in output in either region since the Second World War. Primarily as a result of the stricter pandemic-related lockdowns in the euro area, total GDP losses for 2020 somewhat exceeded those in the United States. Nevertheless, the pattern in private consumption was similar in both economies despite the considerably larger fiscal transfers provided in response to the crisis in the United States. Job retention schemes, which cushioned the significant adverse impact of the crisis on employment, and other direct transfers to firms and households have been key elements of the euro area’s fiscal support. Inflation was more subdued in the euro area, partly on account of special factors like the temporary reduction in German VAT. JEL Classification: E31, E32, E62, J82

Suggested Citation

  • Andersson, Malin & Checherita-Westphal, Cristina & Gomez-Salvador, Ramon & Henkel, Lukas & Mohr, Matthias, 2021. "Economic developments in the euro area and in the United States in 2020," Economic Bulletin Boxes, European Central Bank, vol. 2.
    • Handle: RePEc:ecb:ecbbox:2021:0002:1
    Note: 427284
    as

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    File URL: https://www.ecb.europa.eu//pub/economic-bulletin/focus/2021/html/ecb.ebbox202102_01~922a4dfa85.en.html
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    Citations

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    Cited by:

    1. Lenza, Michele, 2023. "Inflation and wage growth since the pandemic: A comment," European Economic Review, Elsevier, vol. 158(C).

    More about this item

    Keywords

    Economic activity; euro area; United States;
    All these keywords.

    JEL classification:

    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • J82 - Labor and Demographic Economics - - Labor Standards - - - Labor Force Composition

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