According to the latest estimates by the U.S. Department of Commerce, real gross domestic product (GDP) increased at an annual rate of 2.6 percent in the second quarter of 2006 and at a rate of only 1.6 percent in the third quarter. These figures are down noticeably from the 3-1/2 percent average pace of growth of the preceding two years.
I should stress, though, that such differences are also partly the consequence of various other factors, such as product characteristics and business practices. Some press commentators concluded from the ECB’s report that these high cross-country differences reflected insufficient  1  See Morgan, P., Rime, and E. Strahan (2004). “Bank Integration and State Business Cycles”, Quarterly Journal of Economics, 119(4), pp. 1555-85.