February 24, 2015
The NYT won’t name names, but obviously these people don’t know much economics. In a generally useful article about differences in regulatory policy between the European Union and the United States the NYT told readers:
“The talks [on the Trans-Atlantic Trade and Investment Pact] are considered more of a priority for Europe, which is mired in deflation and high unemployment, than the United States, where the economy is recovering.”
An analysis by the Centre for Economic Policy Research in the U.K. (no connection to Washington CEPR) found that the pact would increase the EU’s GDP by 0.5 percent after its full effects are felt more than a decade after it is implemented. This translates into a boost to EU growth of less than 0.05 percentage points annually.
This is not much of a cure for stagnation. Even if the number were doubled its impact on growth would be too small for people to notice in their everyday lives. Furthermore, this calculation does not take account of any negative impact on growth that could result from higher prices for drugs and other products due to the stronger patent and copyright protections that will almost certainly be part of any deal. It also doesn’t include losses that may be suffered if regulatory changes damage the environment or public health.
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