US economic news has been pretty good lately. Our labor market has fully recovered from Covid and then some, defying predictions of permanent “scarring” from pandemic disruptions. Inflation is coming down, falling faster than in any other large advanced economy. At the same time, economic problems seem abundant abroad, especially in China, where the end of the “zero Covid” policy did not bring the expected economic growth.

Perhaps inevitably, I’ve recently felt a mood swing about how America sees itself in the world. American triumphalism — we are No. 1! – comes back

As always, we should curb our enthusiasm. Our global reputation is never as good or as bad as conventional wisdom has it at any given time. And the downside of puffing up about our relative performance is that we may not learn from things that other nations do better.

I say this as someone who has seen us go through several ups and downs on this front. There was the manic Morning in America phase of the mid-1980s, followed by the depressed mood of the early ’90s: “The Cold War ended and Japan won.” Then came the late 90s rise of triumphalism because America temporarily took the lead in using the internet, which retreated as other countries also went online, productivity gains from information technology. faded awayThe United States led the way to a global financial crisis and China emerged as a powerful economic rival.

Now the boasting is back, with a special emphasis on ruining European economic performance. For example, I have seen media organizations that really should know better saying things thus: “The economy of the United States is almost twice as large as that of the eurozone. In 2008 they were similar,” which appeared in a chart in The Wall Street Journal.

This is not exactly a false statement, but it is deeply misleading. It is true that in 2008 the dollar value of our gross domestic product was only 4 percent higher than that of the eurozone — the group of European countries that share a common currency — while by 2022 the dollar GDP of the United States was 81 percent larger. But most of that widening gap reflected the decline value of the euro relative to that of the dollar on currency markets rather than real differences in economic growth. And as any international economist can tell you, a strong currency is not at all the same thing as a strong economy.

Measured at purchasing power parity — that is, adjusted for differences in the cost of living — the American economy was 15 percent larger than the economy of the euro area in 2008; it is now up to 31 percent. That’s still a significant difference in growth performance, but not the yawning gap that the dollars might suggest.

And almost half of the performance gap that remains if you look at the exact numbers simply reflects demographics. (Demographics is, by the way, a huge factor when comparing US economic performance to that of Japan, which has a rapidly shrinking working population.) working population has risen nearly 6 percent since 2008, while that of the eurozone has fallen more than 1 percent. Adjusting for differences in the growth rate of the population in question still leaves Europe with some relative underperformance, enough to be significant and require an explanation, but not enough to justify the apocalyptic rhetoric that some Americans throw around.

Put it this way: Just comparing dollar values ​​of GDP in America and Europe probably exaggerates the true gap in economic performance by a factor of about 10.

My view is that all modern economies are roughly at the same level of technology. They are also all capable of achieving remarkable things when they put their minds to it. Did people notice how quickly Pennsylvania managed to reopen I-95 after a section of the crucial freeway collapsed?

But our sophisticated, capable societies often make different choices. Some of these choices are just that – choices where there isn’t necessarily a right answer. For example, one reason that European nations generally have a lower GDP per capita than we do is that their workers get a lot more vacations. We have more stuff; they have more time. De gustibus and all that.

In other areas, however, some countries are almost certainly wrong. Europe’s late growth probably partly reflects inflexibility and resistance to innovation. Americans, on the other hand, should ask themselves why we seem to be worse at construction livable cities or, to take one important aspect of life, not dying: the United States lifetime was far behind comparable countries even before Covid.

The point is that advanced countries are, in important ways, laboratories for economic and social policy: No one is the best at everything, and we can learn a lot by looking at things that other countries seem to do better than us.

Americans, however, have always had a hard time learning from the experience of other countries. A return of economic triumphalism will reinforce that insular tendency, especially if we throw around numbers that grossly exaggerate our relative performance. The US economy has been doing pretty well lately, but let’s not let it get to our heads.

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