The Indicator｜Will US economy still the envy of the world

ADRIAN MA, HOST:
This is THE INDICATOR FROM PLANET MONEY. I'm Adrian Ma.

DARIAN WOODS, HOST:
And I'm Darian Woods. A big part of Donald Trump's victory in the presidential election came down to the economy.

SIMON RABINOVITCH: A vast majority of Americans think that the economy is not working in their interests.

MA: Simon Rabinovitch is U.S. economics editor for the weekly magazine The Economist.

RABINOVITCH: The thing, though, is that when you look at America relative to other rich world countries, to other developed advanced economies, America is doing and has done remarkably well.

WOODS: There's a disconnect there, right? Millions of Americans' personal economies are not feeling good, which is partly why Donald Trump made huge gains with voters across the country. But as Simon points out, the U.S. economy, as a whole, is doing really well.

MA: Today on the show, Simon lays out his argument for why the U.S. economy has been and continues to be the envy of the world, but also why, with the election of Donald Trump, America's economic exceptionalism could be at risk.

You've heard the expression keeping up with the Joneses. Well, on a global level, the United States of America is the Joneses.

WOODS: And believe it or not, despite the turmoil of a pandemic and inflation, that economic dominance has actually accelerated.

MA: Consider that in the past few years, U.S. economic output has increased three times faster than countries in the eurozone.

WOODS: Or consider this - among the G20 group of nations, which includes countries like Canada, Germany, China and Japan, the U.S. is the only one whose employment and GDP has actually exceeded pre-pandemic expectations.

MA: These stats and more appear in a recent report in The Economist titled "Envy Of The World." In it, Simon Rabinovitch and his coauthor Henry Curr argue the U.S. economy has way outperformed both its allies and its rivals. And when I reached out to Simon to understand why, he said this economic exceptionalism is driven by four big structural factors. And the first is productivity.

RABINOVITCH: So productivity is absolutely key to understanding any economy's growth potential. Ultimately, what dictates an economic size, you know, over a matter of years and decades, is how many people are working and how productive they are. So if you just look at per-worker productivity in the U.S., since 1990, it's increased by about 70%, whereas in other rich world economies, it's closer to 40 or 50%. So what drives that? One, business dynamism. It's a lot easier for businesses to go bust, but also for new ones to be founded in the U.S., It's easier for workers to move around to where they're actually needed.

Number two, a lot of investment in capital. It's higher in the U.S. than elsewhere. That's not just in physical structures but also critically in software, research and development. America is very strong in that. And then number three is tech dominance. American companies tend to be faster at adopting new technology, something that we're seeing now with artificial intelligence. So all these things feed through together to make the U.S. a more productive economy.

MA: OK, so productivity is one wind at the U.S. economy's back. The next one that you go into is energy as a key economic driver.

RABINOVITCH: Yeah. So I mean, this one is fairly straightforward in that there was the great shale revolution of the early 2000s. Obviously, environmentalists are not terribly happy with the outcomes of that, but economically, it's quite profound its impact. It has made America the world's biggest producer of both oil and natural gas. First of all, it's good for the U.S. terms of trade. Energy is one of the few sectors in which the U.S. is actually a net exporter. But more crucially, it insulates America from global volatility, from global price spikes. U.S. consumers might complain a little bit about the price of gas at the pumps. But the fact is compared to heating prices in Europe, in Asia, they're incredibly well-off, incredibly well-insulated.

MA: A third thing that you use spotlight as driving U.S. outperformance is the stock market. So how is this playing a role?

RABINOVITCH: It's amazing when you look at the numbers. The U.S. economy is, you know, roughly 20% of the global economy. But the U.S. stock market is about 60% of the global stock market by capitalization. So, you know, there really is outsized power there. You have a lot of faith in U.S. markets because of the rule of law, which is something that attracts investors globally into America. If you're a tech start-up anywhere in the world, you'll look to get listed in the U.S. You'll look to set up operations in America as well. It's one of these things that is really a virtuous cycle for the U.S. economy.


🌟 字数限制，完整文本见公众号【琐简】，回复"1"可进【打卡交流群】