Economic developments in the euro area and in the United States in 2020

Malin Andersson, Cristina Checherita-Westphal, Ramon Gomez-Salvador, Lukas Henkel and Matthias Mohr
Authors registered in the RePEc Author Service: Cristina Checherita Westphal

Economic Bulletin Boxes, 2021, vol. 2

Abstract: This box compares the economic performance of the euro area and the United States during 2020. While it is not yet possible to assess the long-term impact of the coronavirus (COVID-19) pandemic, it is interesting to take stock of the economic developments that have led to the worst loss in output in either region since the Second World War. Primarily as a result of the stricter pandemic-related lockdowns in the euro area, total GDP losses for 2020 somewhat exceeded those in the United States. Nevertheless, the pattern in private consumption was similar in both economies despite the considerably larger fiscal transfers provided in response to the crisis in the United States. Job retention schemes, which cushioned the significant adverse impact of the crisis on employment, and other direct transfers to firms and households have been key elements of the euro area’s fiscal support. Inflation was more subdued in the euro area, partly on account of special factors like the temporary reduction in German VAT. JEL Classification: E31, E32, E62, J82

Keywords: Economic activity; euro area; United States (search for similar items in EconPapers)
Date: 2021-03
Note: 427284
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Citations: View citations in EconPapers (1)

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