Noah Smith
· Noahpinion
· May 15, 2026 at 07:55
· ⏱ 5 min read
| Read on Substack ↗
Summary
The article examines the debate over whether the US or Europe is richer, concluding that America is clearly wealthier, though living standards are comparable when accounting for personal preferences. Productivity growth in Europe has stagnated relative to the US, which the author views as a real failure, especially given competitive threats from China. The piece is a macro-educational analysis with no actionable trade ideas for traders.
•The US is considerably richer than most European countries, though a few top European nations are only slightly poorer.
•Europe has kept pace with America in living standards but has stagnated in productivity growth while the US has grown strongly.
•Net migration between Europe and the US is small, but it consistently favors the US (no European country has a negative net migration with America).
•The debate was sparked by a WSJ op-ed by Joseph Sternberg and a response by Paul Krugman, with follow-up critiques from Pieter and Luis Garicano.
•The author notes that if open borders existed, working-class migration might reverse the pattern due to Europe's welfare states and urban safety.
•Life satisfaction surveys place the US around the middle of Western European countries, suggesting comparable overall well-being.