Larger government stimulus during the pandemic and a higher propensity to run down “excess savings” have contributed to particularly strong growth in the US. On the other hand, a significant terms of trade shock from the war in Ukraine and feeble productivity growth in Europe are the key reasons why economic activity has been much weaker there. And although we expect GDP growth in the US to slow this year, we think the US economy will continue to outperform other advanced economies.
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