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The Committee's new findings conclude that since the last trough in 2013Q1, the euro area has been recovering at a slow but steady pace which is commensurate with that of the US recovery.
- The economic expansion that started after the 2013Q1 trough (see October 2015 findings) is carrying on.
- In 17 quarters of economic recovery the euro area has seen a weak but persistent GDP recovery of 7.03%.
- Euro area employment has expanded at the fastest rate in this period when compared to all previous euro area recoveries.
- Despite being slow by its own historical standards, the post-recession recovery of the euro area is commensurate with that of the US considering that it began later, after the double-dip European recession that followed the global financial crisis.
Detailed Findings
Four Years of Euro Area Recovery
The Euro area has experienced a weak but persistent recovery in terms of GDP growth rate. In 17 quarters of economic recovery, GDP in the Euro area has grown by a cumulative 7.03%. This is low by historical standards – that is, below the rate at which Euro area GDP had recovered 17 quarters after the onset of previous expansions. It is, however, consistent with historical evidence on recovery after a financial crisis.
Euro area employment has expanded in 17 quarters at the fastest clip of all previous euro area recoveries and stems from an increase in the number of persons working
The exceptional pace of employment and investment recovery may reflect their much steeper than usual fall during the latest double-dip euro area recession. Investment reached its pre-crisis level in 2016Q2 while employment caught-up with its pre-recession level in 2015Q2.
Euro Area and US Comparison
The performance of the euro area is indeed comparable with the rate at which the economy of the US had recovered 17 quarters into its latest recovery, started in 2009Q2. Despite being very slow by its own historical standards, the post-recession recovery of the euro area is commensurate with that of the US considering that it began later, after the double-dip European recession that followed the global financial crisis.
What is the Euro Area Business Cycle Dating Committee?
The CEPR Euro Area Business Cycle Dating Committee’s task is to establish the chronology of recessions and expansions of the original eleven euro area member countries plus Greece for 1970-1998 and entire Euro area from 1999 onwards.
The CEPR Euro Area Business Cycle Dating Committee met in London on 2 March 2017 and continued its deliberations by e-mail exchange until July 2017. The Committee’s main conclusion is that since the last trough in 2013Q1, the euro area recovery is proceeding at a slow but steady pace. Notably, the post-recession recovery of the euro area is commensurate with that of the US recovery, considering it began later, after the double-dip European recession that followed the global financial crisis.
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