ONE ECONOMY TO RULE THEM ALL:

Switching gears back to aggregate demand, the Eurozone has ended up with the worst of both worlds in terms of growth and inflation. The US has stronger household balance sheets, rising incomes, and rapid real output growth coupled with inflation while the Eurozone has weaker wage and income growth coupled with equally high inflation. The wage data we have is, again, imperfectly comparable but still shows an important distinction--wages in the US are rising rapidly while wage growth has actually slowed down in the Eurozone.

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