French Economy Vs US Economy

The United States economy is one of the biggest in the world. To compare its size, it is put up against the French economy. France is home to 66 million people as opposed to the U.S. which is home to around 323 million, almost 5 times as many people. This divide among the population is one of the reasons the United States remains one of the leading economies in the world. To examine the two economies further, one must look at inflation rate, the unemployment rate, gross domestic product, and interest rates. Along with those, one must also consider imports and exports for international trade, the central banks, and the monetary and fiscal policy put in place. First up is the inflation rate.

A country’s inflation rate measures how much the prices

Production includes the sum of consumption, investment,government spending, and net exports. A country’s GDP is the biggest indicator of the state of their economy. In 2016, France’s GDP was $2.4 trillion and made up nearly 4% of the world economy. Their GDP per capita (an even better way to judge country’s performances) was $42,013. In comparison, the United States GDP in 2016 was $18.5 trillion and made up nearly 30% of the world economy. While this is an incredibly huge difference, their GDP per capita was $52,194, which is only about $10,000 more making the divide a little more manageable. While the U.S. seemed to have a slow start to 2017 with GDP growth, there is still a clear advantage when it comes to total production (Karmalou,

These include monetary policy, facilitated through the central bank, and fiscal policy, facilitated through the government. The monetary policy in France consists price stability within what is called the Eurozone. This is all the regions in Europe who use the Euro as currency. They also aim to keep inflation relatively low. France does not do government bonds like the U.S., instead they have their own system of loans to handle the money supply. For fiscal policy, the French have put tax increases and budget cuts in place to cut the extremely high deficit. Among these cuts include government spending (“France Economy,” 2017). According to the Federal Reserve’s website, U.S. monetary policy consists of open market operations, reserve requirements, and discount lending. All of these influence supply and demand of federal funds and influence interest rates in the U.S. (“Purposes and Functions,” 2017). As far as fiscal policy is concerned, the current administration is focused on deregulation and tax cuts for businesses. This may cause an increase in demand as consumers spend more. Both the French and America are on close terms as far as monetary and fiscal policy goes (Bernanke,