Challenging the Narrative of European Decline: Revised, Free Repost
Summary
Krugman argues that the so-called European decline is overstated because productivity metrics mislead the comparison with the US. He shows that PPP and constant-price GDP tell different stories, and that the apparent gap largely reflects price effects and sector mixes rather than true living standards. The piece emphasizes IT-driven growth, price pass-through to consumers, and warns Europe to watch geopolitical access to key technologies.