Saturday, 3 January 2015

An update to my post about the British and French economic recoveries

Earlier I posted about the British and French economic recoveries, suggesting that the UK's has been somewhat better since 2009. My friend Ask argues that it makes more sense to begin the analysis from the pre-recession peak (i.e. 2007) than than from the depth of the recession (i.e. 2009), since one might expect a country that experienced a particularly severe recession (like the UK) to bounce back faster than a country whose recession was not quite as severe (like France). This is a reasonable point. Yet one could argue that it doesn't make sense to begin from the pre-recession peak either, since a country that experienced a particularly severe recession is likely to have experienced a particularly pronounced boom beforehand. 

For the sake of completeness then, I present some additional analyses. The first chart (below) plots change in GDP per capita since 2000 in the UK and France. And the second chart plots change in GDP. As both charts indicate, the UK underwent a substantially more pronounced boom during the 2000s than France. The single biggest boom year is 2003, when the British economy grew by 3.9%, while the French economy grew by only 0.8%; growth in GDP per capita that year was 3.5% in the UK, and only 0.1% in France.

The final table below displays the UK-France difference in the percentage point change in GDP per capita and GDP between a particular start year and a particular end year. For example, the value '7.0' indicates that the British economy grew by 7 percentage points more than the French economy between 2002 and 2014. Overall, the table indicates that the relative performance of the two economies depends on exactly where one begins. Between 2005 and 2014, GDP per capita grew more in France than in the UK. But between 2004 and 2014, it grew more in the UK.

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