Will Europe or the US Recover Faster from Coronavirus?

After the devastating financial crisis of 2008 and 2009, the United States recovered much more quickly than Europe, which suffered a double-dip recession. This time, many economists say that Europe may have the edge. The main reason America did well was the rapid response of the government and the flexible nature of the American economy, quick both to fire workers but also to hire them again. Europe, with built-in social insurance, tries to keep workers from layoffs through subsidies to employers, making it harder to fire and more expensive to rehire. But this is a different kind of collapse, a mandated shutdown in response to a pandemic, driving down both supply and demand simultaneously. And that difference creates the possibility that the European response, freezing the economy in place, might work better this time.