Given that most of the EU leaders have the political accumen of Jimmy Carter, this is not a surprising result.

Platfrom shoes! Corduroy! Disco! Metal-foil wallpaper! Avacado green applkiances! Donnie and Marie singing "Morning Side of the Mountain!" Good Times, Three's Company, and The Dukes of Hazzard! These Europeans are so much more sophisticated than us uncouth Americans.

Anon and Mike beat me to the punch. By the way, imagine how far back we would have to push for parity if the euro/$ exchange rate was what it was was just three years ago. This kind of temporal purchasing parity analysis would have suggested that a 1:1 euro/dollar was way too cheap a euro. What does this say about the theory of the "plunging" dollar? Most likely, the euro was ridiculously undervalued and once the US decided not to push for a ridiculously hard dollar it rose...

Okay, okay, but let's be moderate in our comparisons. After all, these things are cyclical; there will be a time when we're in recession and Europe is growing relatively fast. To avoid listening to European gloating then, we should emphasize the correct position now: It's not what happens in any one year that matters, but what happens in the long term. (Provided we don't slip into socialistic policies of the EU variety, we'll remain better in the long term, but we must attend to that proviso.)

No, there won't.

--To avoid listening to European gloating then, ---

We avoid it now and they're not happy. they will never be happy. They're not happy when the $s up, down, not happy period.

I remember the mid-80s, they were complaining, then, too.

Few things are more predictable than the chorus of voices saying "Business cycles are a thing of the past" a few years into every economic expansion. The only thing more predictable is that the expansion eventually ends.

Tom:

When? This one has gone twenty years plus.

I don't know when, but eventually. Do you really think there will never be a change in relative economic performance, even if only for a year or 18 months, between now and the time the sun is a burnt-out cinder?
As far as the last 20 years comment, I haven't chacked, but I really doubt you're right about that. AFter all, we've had two recessions since 1990; I rather think that during at least one of them the Continent had positive growth, ergo, outperformed us growth-wise.
Maybe I'll check up and come back later.

Tom:

You aren't talking about a cycle anymore at that point.

Neither was a recession.

Meanwhile: "The nation is marching along a permanently high plateau of prosperity." - economist Irving Fisher, 1929

Tom:

Yes, and had they understood monetary theory, trade, deficits, and demographics just a little better there's no reason that shouldn't have endured or at least the Crash been much milder.

I promise to dig up some relevant data and return to this - and I'll admit if I was wrong about the 20 year thing; I'm not a wuss. However, I AM talking about cycles - that's what economists call ups and downs in output. And there definitely was a recession 1990-91, and also in 2001, unless the NBER changed their mind again since the last time I checked.

While I hunt for data, here's the relevant terminology. This is from the most popular Intermediate Macro textbook; it's author also happens to have been W's Cheif Econo-guru until recently:

"There are repeated periods during which real GDP falls, the most dramatic instance being the early 1930s. Such periods are called recessions if they are mild and depressions if they are more severe." - N. Gregory Mankiw, 5th ed., p.4.

Eckhard Wurzel, Head of the Desk for Germany and Austria, Economics Department, OECD,
http://www.aicgs.org/research/modell/wurzelcase.shtml. German real GDP growth was positive in 1990 and 1991. In fact, it was 5% per year or higher. QED.

The NBER already changed on the 2001 data and is talking about changing on the 90-91. GDP doesn't go down here anymore.

OJ - Call me when they actually change the 1990-91 figures.