In the 1990s many academics and politicians perceived the U.S. as a region with high economic growth rates and a large rate of job creation, with low inflation rate and low unemployment rates. The U.S. market economy became a paradigm of a modern, flexible market economy, with lower taxes, less generous unemployment and welfare payments and less regulated product, financial and labor markets.
The low growth rates in Europe and its high unemployment rate, 9–10 percent on average, were seen to be caused by over-regulated product and financial markets, less flexible labor markets, generous welfare state measures, expansionary fiscal policy, and high public debt.
With the launch of the EURO and the creation of the second largest internal market in the world economy, the EURO-Area, the prospects for economic growth and labor market performance in this region have changed.
With the Euro stabilized and the recognition of large markets in Europe, the pendulum in the perception of Europe appears to be swinging back to a more proper evaluation of the European welfare state, its infrastructure, educated labor force, high level of human capital and large markets. Europe again became an attractive field of academic research (and economic investment). This research seemed even more urgent as Asian economies in India and China were growing at high rates.
Then, with the financial meltdown in 2007-2009 and the subsequent worldwide great recession, the economic analysis of boom-bust cycles, whether caused by real or financial forces, has become an important research topic.
What is required now is a suitable comparative macroeconomic analysis, so that the advantages and disadvantages of different types of market economies in dealing with problems are properly studied and policy solutions provided.
Proceed to current projects and specific areas of research in comparative macroeconomics for more details.