Great post. It looks to me that spending growth by country really kept the same patterns and differences by country that had before the pandemic, pointing at more structural causes within those economies, eg demographics, taxation, labour market, gdp growth.
If you did the same charts starting at 100 in 2017, we may see a long term pattern as opposed to a divergence post covid. What do you think?
There is some truth in that for some economies I've shown, but not all. Real consumption is below the pre-COVID trend (from 2017) in the UK, euro area, Japan and Canada. The US is close to trend, as in NZ. Australia is above trend but is more complicated because pre-COVID was weak for Aussie spending and it's now been flat for more than a year anyway.
Great analysis Justin! It's interesting that the unemployment spikes in the EU, UK and NZ were relatively modest during COVID. EU outcome is presumably due mostly to their labour laws but I wouldn't think that was the situation for NZ and the UK? Do you happen to know what employment support schemes those countries used? Direct subsides? Tax incentives? It would be interesting to learn why the responses by employers were much less aggressive. That would make for a very interesting comparison and potentially useful for policy makers in every country.
Great post. It looks to me that spending growth by country really kept the same patterns and differences by country that had before the pandemic, pointing at more structural causes within those economies, eg demographics, taxation, labour market, gdp growth.
If you did the same charts starting at 100 in 2017, we may see a long term pattern as opposed to a divergence post covid. What do you think?
Thanks for your comment!
There is some truth in that for some economies I've shown, but not all. Real consumption is below the pre-COVID trend (from 2017) in the UK, euro area, Japan and Canada. The US is close to trend, as in NZ. Australia is above trend but is more complicated because pre-COVID was weak for Aussie spending and it's now been flat for more than a year anyway.
Great analysis Justin! It's interesting that the unemployment spikes in the EU, UK and NZ were relatively modest during COVID. EU outcome is presumably due mostly to their labour laws but I wouldn't think that was the situation for NZ and the UK? Do you happen to know what employment support schemes those countries used? Direct subsides? Tax incentives? It would be interesting to learn why the responses by employers were much less aggressive. That would make for a very interesting comparison and potentially useful for policy makers in every country.