Saturday, May 2, 2009

Comparing recessions in Europe and US

The St.Louis Fed have excellent graphics comparing the economies of US, UK, Germany and France, on four important economic indictors (also tracked by the NBER) - industrial production, real income/real compensation, employment, and real retail sales. It is clear that on all the indicators, in the US, the ongoing recession is already the worst or set to become the worst.

In contrast, for Germany, apart from Industrial production (which highlights the export-dependent nature of the German economy, which has been badly affected by the global nature of recession), all other indicators are at no worse than that in an average recession.

Further, cross-country comparisons between the data for these two, France and UK confirms the fact that the recession is at its severest in the US.

The St.Louis Fed's latest report on recession trends is available here. Using data from the Economic Cycle Research Institute (ECRI), it writes that six of the world’s seven major developed countries that make up the G7 are now experiencing a recession. Only Canada has escaped thus far. Further, 61 percent of 18 developed and emerging countries (the G7 plus 11 other major U.S. trading partners) are now in recession, according to the ECRI.

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