Left Outside

The Eurozone as a Country

I think this data from WolframAlpha is worth thinking about with reference to thinking about the Eurozone as a country.

1 | Luxembourg | $107000 per person per year
2 | Netherlands | $48300 per person per year
3 | Ireland | $47600 per person per year
4 | Austria | $45900 per person per year
5 | Belgium | $43800 per person per year
6 | Finland | $43700 per person per year
7 | Germany | $41500 per person per year
8 | France | $41200 per person per year
9 | Italy | $35100 per person per year
10 | Spain | $32400 per person per year
11 | Greece | $29400 per person per year
12 | Cyprus | $28300 per person per year
13 | Slovenia | $24300 per person per year
14 | Portugal | $21700 per person per year
15 | Malta | $20300 per person per year
16 | Slovakia | $18200 per person per year
17 | Estonia | $14400 per person per year

Some thoughts. The most successful currency union I can think of is the United States. The Eurozone is very different from the US is some very important ways normally the negative are emphasised, but some of these differences are positive.

Potted History: The South and the North had different institutions up to the 1960s, what with the South being very, very racist. Unsurprisingly this left the South much poorer. After much brouhaha, the North won, finally completed the South’s reconstruction and the South began to converge on the living standards of the North. The South went from about half as wealthy, they were even still picking about half their cotton by hand, to about as wealthy. There is about a three to one difference between the poorest parts of Europe and the richest (ignore Luxembourg). That convergence took basically the whole history of the United States until very recently, this does not bode well for Europe, disparities can exist for a very long time.

But, despite larger inequality with respect to income, nowhere in the Eurozone is as much of a basket case as was the US South in terms of institutions. This means that it should see faster convergence on wealthy living standards which is one thing which makes the current crisis such a tragedy. There are no fiscal transfers within the Eurozone analogous to those within the US but neither does Europe have the terrible legacy the poorer parts of the US had. So there are (limited) reasons to be cheerful.

UPDATE: As Innocent Bystander points out in the topics, I’ve just provided a list of numbers without context. As you’re all not psychic let me say they refer to Gross Domestic Product Per Capita.

Filed under: Economics, Foreign Affairs, History, , , , , , , , , ,

When NGDP is Depressed, Employment is Depressed

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