This election season has seen a great deal of negativity about the state of the US economy. And it’s true that economic growth since 2008 has been slower than some earlier periods in US history.
The US economy has been doing poorly. Europe and Japan have done much worse.
But this chart from the Organization for Economic Cooperation and Development helps to put the performance of the US economy in perspective:
The US economy has grown by a bit more than 10 percent, adjusted for inflation, in the eight years since the financial crisis began. In contrast, the euro area grew by less than 1 percent, and Japan’s economy is essentially the same size it was in early 2008.
This partly reflects a difference in population growth — the US population has grown by about 6 percent since 2008, while the eurozone grew about 2 percent and Japan’s population actually fell. But even adjusting for population, the US economy has been outperforming the economies of Japan and the euro area.
The euro area only includes countries that have adopted the EU’s common currency, the euro. It doesn’t include Great Britain, and so this slow growth doesn’t directly explain why so many Brits were anxious to leave the EU. However, this kind of anemic growth certainly didn’t help British supporters of EU membership make their case.
What explains this anemic growth? Monetary policy, in large part. The European Central Bank has made a series of blunders over the past eight years that have prolonged and deepened the eurozone’s depression. Meanwhile, Japan has been struggling with an aging population. With fewer and fewer working-age people, it’s hard to keep economic growth going.
