Europe, the economic power of the United States will not change soon

Welcome back. The two subjects are currently forming a market sense. First, the policy agenda of Donald Trump is compromising to the US economic, financial and institutional advantage. Second, relative stability and political developments are developing the worldview in Europe.

In March, the American Foundation in March showed the most acute rotation of the European capital in the US Sharing and record fields.

Now a theory floating as a result of these trends, the advantage of long-term economic growth over the continent of the American continent is whether there is a twilight. My last for me raise us and Bullish Europe Analyzes, I think this concept is vaccinated. Here, why will Europe’s economic adolescence will not take any time soon.

The first is the size of the United States in Europe’s management when it comes to growth rates.

Fitch Ratings is a percentage of American gas supply in the last 5-10 years – capital, labor and technology – an average of 2.5 percent in capital, labor and technology. It was about 1 percent to the eurozone. Before evaluating the impact of policy decisions on both sides of the Atlantic this year.

The productivity will break on the agenda of the Trump. Tariffs will create inefficiency. Uncertainty will invest in capital investment and research. A squeezing on immigration and possible brain drains also weakens labor supply.

However, the damage caused by the President should have been very extraordinary rusties Erode, Andrew Kenningham, Prime Europe economist, the capital’s economy, the capital’s economy, the American advances in Europe:

“There are a larger and more domestic market for the US-scale and stronger enterprise capital ecosystem, more world-class universities and lighter touch.”

Indeed, in terms of general entry, EU employees have an advantage and leads the US physical and financial capital. But the advantage of America’s growth transported mainly How higher “total factor productivity” or its inputs are used.

In Europe, an increase in capital flows is possible if investors see the continent as an alternative safe shelter. However, the effect can be limited to at least investment opportunities.

“European assets can return to rotation. Whether Trump is terrible, the dollar can accelerate the dollar downgrade as a reserve currency, but the widespread capital of the United States will be slow,” Kenningham said.

Thus, can Trump’s important and permanently – can economic dynamism damage this advantage? It depends on how the rest of the second period is expected to be panced.

There are inspections in the department. The president has already softened the most extreme tariff plans and attacks on the independence of the US federal reserves in a period of increased long-term bond productivity.

The wider political pressure will increase. The last inflation and unemployment hit the expectations of the year. The republican consumer confidence, which is prone to confirmation ratings, appears when there is a trump.

Effect available In particular, the tasks in China will be filtered soon. “The price increase and deficiency of the shops will probably be felt by mid-June,” he said. “This weakens the feeling among the republican voters.”

In the next 12 months, the market expectancy for the effective Tariff of the United States, as a result, it is still more than 10 and 20 percent of pain – 20 percent. Work activity will be further fixed with continuous uncertainty. Wall Street now sees a chance to recession 50-50.

There are a thin majority in the Republican Party’s representatives and the Senate House. “Often the intervals of the second term, a topalgül kitchen and unemployment can be felt at the time and unemployment, which can be especially bad for the voting Republicans,” said BCA Stategism Matt Gerken

This does not cause significant damage to the trajectory of the United States economic growth. Trump can be more lean to executive authorities. Political risk strategists emphasize the four main threats: Fed independence, treasury market crash, capital control and somehow legalized legal legalization (politics)

These each may significantly disrupt the US economy and solve the ability to transfer productive revenues over time.

However, most specialists calculate all of them – except for the fed threats – the financial market is low probability measures taking into account the political and judicial barriers. Trump will limit the risk of a special central bank chief, Cedric Chehab, BMI, the necessary approval of any new department of the Cedric Chehab, BMI and the approval of any new department of Congress and an important deviation on monetary policy.

In general, the capital economy does not expect potential growth rates to the potential growth rate of the United States or the Eurozone in the post-Trump’s historical calculations.

This is 10 percent in the rest of the world and 60 percent in its term, and after the president’s trade and immigration policy is in office. It also reflects more benefits of artificial intelligence in the United States than the United States. (Trump will also support adjustment efforts as lean planning rules.)

How likely are that? Considering the trajectory of economic feelings (and restricting tax reduction restrictions, with the tax reduction of negative income effects of import duties April 6 edition), A presidential victory without a Maga is probable in 2028 (although not to be guaranteed).

The last half-century of the survey of the survey offers the power of the party that the head of the voters tends to change their hands when the electorate was very deteriorated at the end of the previous period. More attention to the fact that seems appropriate under the Trump is banned.

In this case, most of the agenda may be empty. Would raise uncertainty. The business would receive an investment. And the capital was likely to return to America.

Although imported money is glue, the economic price of the high tariff wall will probably damage the policy for the execution of tasks, as analyzed over time March 30 newsletter).

This does not mean that the US economy will return to the original growth rate immediately after the Trump. Regular influential damage is possible (especially the MAGA policy was followed). All policies cannot be reversed. However, the main growth rate of the United States will probably be as strong as expected.

What about the ability to catch Europe? “Slow-moving structural factors – as a growth of weak population – Charles Seville, a General Director of Ratings, says. “This puts tenus in investment, productivity growth and active labor market policy.”

The final turns in the EU economic policy are genuine, but it should be excessive. The German defense and infrastructure stimulum will increase growth in the largest economy of the EU, but the region is also required. The wider-order push push of the block is spent on the less advanced technology, the trend can increase the requirement, rather than raising the productivity growth.

To increase Mario Draghi’s European productivity – to increase European productivity – efforts to align the Red Ribbon by the capital and financial association, as well as the Italian Treasury Department will face Lorenzo Codogno, a former chief economist. “The reform process is increasing in normal periods. Negotiations between 27 member states remain a battle.”

The close-round growth worldwide in Europe itself is thinner with the trump’s diary, the uncertainty and trade violation of the United States. These risks also hit political bandwidth for reform efforts.

All this indicates that the continent will not be able to open an important way in the advantage of US growth, especially after the term of the president.

Thus, American factoring in the current economic lead, Trump’s damage, and European reform efforts envisage the advantage of the growth from Europe over the average period of time.

This can be reflected in the current news flow. Recencorency seems to be prejudice while watching the markets. Open Risks in Outlook include Trump’s surprise and 2028 option.

Again, for my foundation, for the economic exclusive exceptional, perhaps with a constant approach to a more diversified approach to reliable airs and reserve currencies, perhaps perhaps perhaps perhaps perhaps perhaps perhaps with perhaps perhaps perhaps. The EU may seem more promising. Nevertheless, the delta between America and the European trend of Europe may change surprisingly.

Where does your assumptions differ? Let me know: freelunch@ft.com or x @ TeamPperikh90.

Food for thinking

How long should governments cost the reduction of existential threats from artificial intelligence? This paper Maths are doing.