Today's Buggy Post Continues . . .
. . . what is now appearing as a mini-series on the comparative rates of job-creation, labor-market participation, and unemployment rates in the US and EU-15 . . . the latter referring to EU-members in West Europe as opposed to the 12 new members in East Europe. All 15 are advanced industrial or post-industrial countries, and their population total is around 380 million. The US population is a little over 300 million now. Per capita income at the end of 2008 was around $47,000 at the end of 2008; for the EU-15, around $34,000 . . . with Germany, France, and Britain slightly above it, Italy and the southern EU countries lower, and Holland, Austria, Ireland, and the Scandinavian countries around $40,000 each.
A Few Other Comparative Data
Germany's population is about 80 million. Britain's, France's, and Italy's is a little over 60 million. Spain, a country that entered the EU-15 in the mid-1980s (along with Portugal) and has enjoyed especially good GDP growth the last several years until the recent economic crisis hit it, has 40 million. Otherwise, except for Holland with about 17 million, the other EU-15 countries tend to have populations between about 5 million in Scandinavia (except for Sweden) and Ireland, and about 10 million in the remaining countries: Austria, Greece, Portugal, and Belgium.
The new East European member-states are generally tiny in population too. Most number between less than a million to 7 million, though Romania has 22 million people and Poland 40 million.
For the EU-27, the total population is around 500 million . . . just a tad under. And, as former Communist-run countries, they have a lower per capita income, roughly $9-10,000 on an average. Some, particularly two or three very tiny ones, have a noticeably higher per capita income, but most of the others are around $7,000 - $10,000 in range.
All the data for GDP and per capita income are given in PPP terms: purchasing power parity, which seeks to take into account different price-levels in the US and elsewhere . Otherwise, in an era of floating exchange rates --- freely floating or managed within a band ---- there would be too many fluctuations in the comparative data and growth trends.
For instance, the euro entered into existence at the start of 1999, with an exchange rate of about 1 euro = $1.20. Over the next three to four years, the euro fell steadily and reached bottom at about $0.85 (85 cents). But real GDP and per capita income in the eurozone countries didn't fall almost 25%. In that period, it actually rose.
Similarly, the euro then rebounded and rose steadily against the dollar after 2002. At its height in 2007, it reached almost $1.60. In that four year period, however, the GDP and per capita income of the eurozone countries didn't almost double, far from it. And so economists, governments, and international agencies work out methods of comparing price-levels and purchasing power of a country's economy and population that dig beneath these marked fluctuations in exchange rates.
Enter the Role of Crime, Imprisonment, Deterrence, and Unemployment and Employment Rates in the US and EU
The buggy commentary on all this is found at Economist's View, the laudable economic web-site run by Professor Mark Thoma of the University of Oregon. Prompted by a Prof. Thoma link to an article that started the thread, the bugged-out stuff deals with all these matters --- plus, the problems that beset comparative data across countries if you just use aggregate-data like GDP and per capita income and unemployment rates across countries without delving deeper into what these aggregate data might be masking.
No need to say more. The buggy commentary is self-explanatory. Click here for it.