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US and euro area growth performances: Are they so different?

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  • Bertoldi, Moreno
  • Orsini, Kristian

Abstract

The Global Financial Crisis and the European Sovereign Debt Crisis plunged the euro area into a double-dip recession cementing the narrative of a struggling Economic and Monetary Union. However, if we look at a longer time horizon that narrative is not fully justified: since its creation, with the exception of the 2011–2014 period, Euro area's per-capita GDP has actually grown as fast as the US. The critical issue behind the different growth performance of the US and the euro area over the last 20 years is related to the Sovereign Debt Crisis and the inability of Euro area institutions to counter in a timely and effective manner economic recessions. Completing the EMU architecture and adopting an appropriate policy mix will be crucial to prevent contagion and bank-sovereign feedback loops from developing in the future and ensure that the euro area grows at its potential.

Suggested Citation

  • Bertoldi, Moreno & Orsini, Kristian, 2020. "US and euro area growth performances: Are they so different?," Journal of Policy Modeling, Elsevier, vol. 42(4), pages 860-877.
    • Handle: RePEc:eee:jpolmo:v:42:y:2020:i:4:p:860-877
    DOI: 10.1016/j.jpolmod.2020.03.010
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    References listed on IDEAS

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    Cited by:

    1. Mirko Licchetta & Giovanni Mattozzi & Rafal Raciborski & Rupert Willis, 2022. "Economic Adjustment in the Euro Area and the United States during the COVID-19 Crisis," European Economy - Discussion Papers 160, Directorate General Economic and Financial Affairs (DG ECFIN), European Commission.
    2. Ioana Manuela Mîndrican, 2023. "Monetary policy measures and strategies in the context of the adoption of the euro currency," Journal of Financial Studies, Institute of Financial Studies, vol. 8(14), pages 84-97, May.
    3. Bertoldi, Moreno & Eriksgård, Annika & Orsini, Kristian & Pfeiffer, Philipp, 2023. "Where is the EU economy headed? The international dimension," Journal of Policy Modeling, Elsevier, vol. 45(4), pages 817-832.

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