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Upturn in profitability at the end of recessions: The causes of the difference between the United States and the euro zone

- "We can see that at the end of recessions (we look at the cases of the recessions in 2001-2002 and 2008-2009), the profitability of companies as a whole (but not large, listed companies) picks up much faster in the United States than in the euro zone, where, in addition, profitability does not return to its pre-recession level."
- "We look at:
• what accounts for this difference: it results from the rapid return of labour productivity to its previous trend in the United States, but not in the euro zone;
• what it entails for the real economy; there is a faster upturn in corporate investment and creditworthiness in the United States;
• what it implies for the financial markets: stock market performance is better in the United States than in the euro zone during economic recoveries, but this is not the case for the credit market."
- "The distortion of income sharing in favour of profits during economic recoveries in the United States adversely affects employment, but neither real wages received by households, nor consumption."
Natixis Flash Economics 334 20100629

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