In the euro area, in addition to the decline in dispersion of inflation, activity and labour cost developments, another key feature is that business cycles are converging and output gap fluctuations are becoming more similar across countries.
This feature is not apparent in the United States, where the dispersion of cycles and of trend GDP growth, seem to explain roughly equal parts of growth dispersion between states. For instance, last year, the acceleration in activity and the rebound in the euro area’s real GDP growth was a widely shared phenomenon across the various euro area member countries.