Strong and Stronger Economies
“In recent months some rich-world economies (notably Germany’s) have basked in the sunshine even as the clouds gathered over America.” Not all strong economies are equal.
The Economist examines different theories on why some strong economies perform better than others: “The best explanation for the uneven pattern of rich-world activity is also the most prosaic: America’s recovery is more advanced and its firms have rebuilt their stocks sooner. Europe’s business cycle tends to lag America’s by a quarter or two. Recent indicators point to greater convergence. The index of American manufacturing published by the Institute of Supply Management unexpectedly picked up from 55.5 to 56.3 in August. The corresponding indices for the euro area and Britain fell back, to 55.1 and 54.3 respectively. America’s economy may have some unique troubles, but its fortunes are still strongly tied to the rest of the rich world.”
