US Fiscal Stimulus Beats UK Austerity

The US economic recovery from the Little Depression of 2007 is doing slightly better than in the UK. An actual comparison is easier to assess than trying to argue a counter factual. 

The pink range around the graphs is the expected recovery paths of the US and the UK economies after 2007. Here the US exceeds expectations while the UK has fallen below expectations.

In year 1 and 2 the US and UK were above expectations. Then the UK falls behind in year 3 and 4, then drops below in year 5. The US exceeded expectations in year 5.

Economic historians will be able to use this comparison to analyze policies of the US as being successful versus those in the UK. Fiscal stimulus in the US will be given the credit while austerity in the UK will be blamed.  



Graph by Mr. Alan Taylor and Mr. Moritz Schularick