Chartbook • 2074 implied HN points • 21 Dec 25
- Whether Europe is "in decline" depends on the data source: some measures show European output per hour matching or exceeding the US, while OECD/AMECO data point to a real gap.
- The productivity difference is mainly driven by a small set of US superstar tech firms and higher investment per worker, while Europe’s shorter hours and social tradeoffs make its economy look different rather than simply worse.
- Recent shocks (COVID and the Ukraine war) widened the gap, but the pattern reads more like a K-shaped divergence—a strong tech-led upleg in the US and a broader downleg for Europe and much of the rest—so 'decline' may be an overstated present diagnosis and a conditional future risk.