An extensive Board article released on Friday:Figure 1 displays the fact that the US has reverted to pre-Covid trend, while other economies have not (pity poor UK, buffeted by Covid and Brexit).
From the Conclusion:
Our analysis points to growth divergence between the U.S. and AFEs being the result of a variety of factors, including differences in monetary and fiscal policies, variations in labor and capital market institutions, and different region-specific shocks. It is currently challenging to judge how much exactly of the divergent performance is explained by each individual element. Overall, our analysis suggests that structural factors play a role in the way different economies responded to cyclical policies, and caution against interpreting recent productivity developments as only reflecting permanent shifts across economies.
More By This Author:One Year Ahead Inflation Expectations for 2025Eric Hovde PredictsRecession Probabilities In Light Of The Ever-Receding Recession
