GORDON RJ- Two centuries of economic growth: Europe in pursuit of U.S.
Though Europe and the United States had similar levels of productivity and an almost identical GDP in the mid-nineteenth century, the economic weight of Europe gradually decreased in 1950 to a GDP and productivity barely representing half of that of the United States. Though Europe has always been willing to return to the level of the U.S., its standard of living remains lower.
"Two Centuries of Economic Growth: Europe in Pursuit of the United States", RJ GORDON wants to analyze and understand the performance gap between the U.S. and major European countries during the last two centuries. Thus, with this text we can find out "How the U.S. has emerged as economic reference, and why Europe is failing to catch up with it. How can Europe be so productive without being able to increase its GDP? Initially we will conduct an inventory of the situation in Europe and the United States.
Then we will discuss the supremacy of the United States, and finally we view the Second World War as a turning point for the economic balance between The United States and Europe. With the database set up by A. MADDISON, we can make an inventory of the U.S. and the European economic performance since 1820 using indicators such as GDP and productivity at work. There was a steady growth of GDP of the United States.
And the growth between 1820 and 1870 was low. However, the increase in U.S. growth was the most striking one between 1963 and 1973. A normal level of growth was seen in 1987. The level of the European growth was not very different from that of the United States (about 1.67% growths per year between 1870 and 2000); this growth was much less and linear. Until 1913, European growth was weaker than that of the United States and during the postwar there was an increase in the growth.
Then, in terms of productivity at work, the United States has fewer variables with respect to the GDP. It was between 1938 and 1950 that the productivity gains have been most significant. In contrast, in Europe, growth in productivity at work is more linear than that of GDP. This productivity remained below to that of the United States until 1950. But during the war boom (1950-1973) it reached a level almost similar to that of the United States in 2000.
Tags: GDP, economic growth, economic balance, postwar, productivity at work
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