The United States’ dual advantage over the euro zone

The United States’ first advantage over the euro zone is that it is an oil and natural gas exporter, while the euro zone imports almost all of its oil and natural gas. Ceteris paribus , this difference increases US income by 2.5 percentage points of GDP relative to euro-zone income. The United States’ second advantage over the euro zone is that it attracts massive long-term capital flows from the rest of the world, while the euro zone has zero long-term capital inflows (equities, bonds, direct investment). This allows the United States to consume or invest 7 percentage points of GDP more than the euro zone.