Here’s John Quiggin‘s reaction to the end of our ten-year European unemployment bet.
Having lost a couple of bets of this kind, I have learned the important proverbial lessons “Fools for arguments use wagers” and “Prediction is difficult, especially about the future”. In this case, I failed to anticipate EU austerity in general, and the bloody-minded incompetence of Jean-Claude Trichet in particular. Because of this, I assumed the EU would have better macroeconomic outcomes than the US, and that this would trump any difference due to labor market institutions.
Best
John
READER COMMENTS
Mark
Mar 5 2019 at 11:10am
A nice escape! Perhaps the bet should be Germany vs. France next time.
Kevin Dick
Mar 5 2019 at 1:05pm
Inside view vs outside view. Bryan is the master of the outside view. Outside view wins bets.
Shane L
Mar 6 2019 at 5:57am
I mentioned in a comment on Bryan’s previous post on this bet that there was enormous diversity in the unemployment trajectories of the EU15. If the question was supposed to explore “labor market institutions”, it probably should have selected individual countries, not the vague EU15.
The EU15 includes countries that are not in the eurozone, so presumably are not greatly affected by, say, monetary policy: UK, Denmark and Sweden.
In general I suspect that some American commentators greatly overestimate the extent of European integration. Individual EU member states have starkly different economic policies. The 2019 Heritage Foundation’s Index of Economic Freedom has two EU15 countries in the top ten for economic liberty (Ireland 6th, UK 7th) as well as France (71st), Italy (80th) and Greece (106th).
https://www.heritage.org/index/ranking
Looking at labor freedom alone, the EU15 consists of a range from 6th most free (Denmark) to 161st most free (Portugal). It seems questionable to assume that a “European labor market regulation” exists at all.
Fred_in_PA
Mar 6 2019 at 2:35pm
Shane;
Thank you for this post.
I am an amateur who follows this blog in the hope of becoming better educated. Your post throws a lot of light — hence enlightenment. Thanks.
MarkW
Mar 7 2019 at 5:54pm
Don’t US ‘member’ states likewise experience quite different unemployment rates and have distinct tax regimes and labor market regulations (right-to-work vs closed-shop, flat vs progressive versus zero income tax, dramatically different minimum wage rates, etc)?
Matthias Goergens
Mar 8 2019 at 3:12am
Labour mobility between American states is bigger in practice than between EU countries. Everyone already speaking English helps.
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