Tuesday, July 27, 2004
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So how's European integration going?
In the Financial Times, Scheherazade Daneshkhu has more. :
For those who believe this is me gloating about European stagnation, it's not. Sclerotic European growth reduced demand for U.S. exports, which widens the trade deficit, which increases protectionist sentiments in the United States (although protectionist sentiment in the EU is all too alive and well). I'm much rather see the Euro area growing like gangbusters.
[Well, yeah, but the Europeans have a higher quality of life than Americans, right?--ed. Not according to the latest UN Human Development Indicators, which incorporates health and education measures along with per capita income (link via the Economist). The United States ranks eighth; the average rank of the Euro 15 countries is 14, and eyeballing where the countries are, that looks like what their weighted average would be as well.]posted by Dan on 07.27.04 at 04:59 PM
Maybe it's the way Dan clipped the FT piece, but the FT piece is being sloppy about the EU versus Eurozone distinction. The issues of Lisbon, accession etc are EU issues, not Eurozone issues. The EU has a much wider range of growth experiences than the Eurozone does because of the excellent UK performance and the good growth potential of the eastern periphery.posted by: P O'Neill on 07.27.04 at 04:59 PM [permalink]
That UN data Dan links to looks screwy to me. Ireland has a higher GDP per capita than the United States ($36,360 to $35,750)??? Doubtful!posted by: Al on 07.27.04 at 04:59 PM [permalink]
Isn't Scheherazade Daneshkhu a great name, though? And she has even been accorded a Chinese version.
Al -- yes, the Ireland data should not be presented like that. The method of calculation is OK, but Irish GDP contains a huge chunk of profit repatriation by multinationals. Lower the figure by 20% to get something that can be compared to other countries.posted by: P O'Neill on 07.27.04 at 04:59 PM [permalink]
The CIA World Fact Book puts Ireland's per capita GDP for 2003 at just under $30k - see http://www.cia.gov/cia/publications/factbook/geos/ei.html.
With all these numbers I always wonder how variations in the exchange rates (e.g. Euro/$) are factored in. Given how close the HDI values of the top 15 countries are, you could probably cook up some funny statistics simply based on exchange rate fluctuations.
Also, Dan, don't you think your statement "the average rank of the Euro 15 countries is 14" is close to meaningless? First, there are only 12 Euro countries. Second, which average rank would you expect 15 countries to have? The highest they could possibly get is 7.5 - and that would assume that the rest of the World is worse off than they are!
Finally, since the Euro hold-outs are countries that thought they could do well without the other countries it's unfair to now compare them without looking at whether they improved relative to the others (or not) since their decision not to join the Euro.
I'm just observing these things - not trying to make any particular point. :-)
gw - the dollar was stronger in 2002 (the year used in the UN's analysis) than in 2003, when the CIA has GDP/capita at under $30k. And other countries don't seem to be affected. In any event, I thought Purchasing Power Parity (PPP - or whatever the acronym is) was supposed to eliminate that problem.
Something just looks mighty odd.posted by: Al on 07.27.04 at 04:59 PM [permalink]
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