The major difference between the United States and the euro zone today: The level of potential growth

T here is currently significant demand stimulus in both the United States and the euro zone , which is accelerating the convergence of the unemployment rate towards the structural unemployment rate. Once this convergence has been completed, growth in both countries will return to the level of potential growth. Herein lies a major difference between the United States and the euro zone: In the United States, companies have reacted to the rapid demand growth amid significant hiring difficulties by becoming more efficient, leading to a marked increase in productivity gains; This is not the case at all in the euro zone, where productivity gains have become lower due to a lack of effort by companies to modernise. The United States is therefore going to converge towards a high potential growth rate while the euro zone converges towards a low one .