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The US economy’s superior performance compared to Europe: What’s driving the difference?

ByEditor

Feb 11, 2024

Unlock the Editor’s Digest for free by signing up for the Financial Times’ free schools access program. Each week, Roula Khalaf, Editor of the FT, selects her favorite stories for the newsletter. Teachers can access this article, which includes discussion questions, as part of the program. To register or to find more details, visit their website.

The selected article discusses how the US economy is outperforming Europe’s, and includes several questions for discussion, such as the IMF’s growth forecasts for the US, the eurozone, and the UK for 2024. It also delves into the reasons for the economic disparity between the US and Europe, and how the invasion of Ukraine by Russia has affected both economies differently.

The article addresses the structural advantages of the US over Europe in terms of industry and technology and explains how access to finance is more straightforward in the US, and its impact on economic growth. It also covers how demographic trends and labor market dynamics contribute to the economic growth gap between the US and Europe, as well as the fiscal challenges the US faces that could threaten its economic growth.

To further explore the economic aspects between the US and Europe, the World Bank’s website offers historical rates of GDP per capita for a comparison between the Euro Area and the United States. The site also provides data on the growth rates between the two areas from 2008 to the present. Additionally, the site features information on the country in the Euro area with the lowest GDP per capita in 2022, in comparison to the United States’ GDP per capita in the same year.

For classroom use, there is also the FEE FT Classroom Edition with classroom-ready presentations and suggested answers for teachers. It is provided by Joel Miller and James Redelsheimer of the Foundation for Economic Education. Teachers can access this resource for additional educational material on the topic.

By Editor

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