The economy as a combat sport

If one imagines economic activity as a sporting competition, there is no doubt about the name for the winner for the 2024 season that is now closing. As in the previous season, the US economy has surprised by its strength, or to put it in other words, by the insatiable appetite of its consumers. At the same time, China has never managed to live up to the hopes raised by the lifting of anti-Covid restrictions. The authorities there have announced a new stimulus plan that is hardly convincing. In Europe, activity has staged a timid recovery after several quarters of stagnation, but this is a fragile improvement as it only reflects the dynamism of exports, not that of internal demand. For the 2025 season, the new coach of Team USA who will take up his position next month is a proponent of an attacking game, not to say a frankly aggressive one (tariffs for everyone), with strong ambitions for results (stronger growth) and no let-up on steroids (tax cuts and deregulation). Some referees (Fed) may object to this. In Europe, some wise men have diagnosed the causes of underperformance and offered their best advice (reports by Draghi and Letta), but no-one is in a hurry to follow it. The composition of teams is uncertain, in particular in forward positions where the German and French players are injured or tired at the same moment (political crisis). One of them requires a fitness class (revise the industrial model) and the other a diet (reduce government excess spending). In reality, most of the talk is about the colour of jerseys, and during this time everything is at a standstill.