IESET.
Hypotheses·growth·us_eu_divergence_decomposition

The US-EU GDP per capita (PPP, constant international dollars) gap has widened materially between 2000 and 2023.

The gap ratio (US divided by EU-27 average) grew from approximately 1.25 in 2000 to approximately 1.45 by 2023, a divergence of ~20 percentage points. The widening is not primarily demographic (both regions age) or measurement-artefact; it is associated with specific policy-content differences: US energy- cost advantage post-2010 shale revolution, EU cumulative regulatory burden on the digital sector (GDPR 2018, DMA 2022, AI Act 2024), US capital-market depth enabling tech-sector scale that EU bank-financed systems produce less of, and EU Stability and Growth Pact constraining countercyclical fiscal response. This hypothesis establishes the divergence as a stylised fact and attempts a first-pass decomposition.

INCONCLUSIVEengine/runs/us_eu_divergence_decomposition

INCONCLUSIVE_DATA_PENDING — treatment 'context_inferred_treatment' has no cross-country variation within years under year fixed effects

confidence cueResult card produced; verdict unclassified.

policy briefCoverage too thin

In ordinary language

Over a long period, do more market-oriented institutions translate into higher income or productivity, once the comparison looks beyond a single success story?

plain answer

This test cannot make a firm call yet. treatment 'context_inferred_treatment' has no cross-country variation within years under year fixed effects

why it matters

Growth claims can look convincing in single success stories. This test asks whether the pattern survives a broader comparison.

how the test works

It compares 11 country or place units from 2000 to 2023, using a panel fe design, with fixed effects for country and year.

what was measured
What we checked
  • Log income pc cost-of-living adjusted
  • Income growth rate
what this does not prove

A single test is not the whole truth. It narrows the claim under a specific sample, time period, and method. Strong policy conclusions need the pattern to survive nearby tests, alternative data, and serious objections.

verification

6 input datasets, 0 unresolved missing series, provenance status: reproducible hash verified.

Results

engine/runs/us_eu_divergence_decomposition
Loading chart…

Who has skin in the game — schools predicting on this

17 schools list this hypothesis as a test of their position. The chips below are school-level scoreboard outcomes, not a second hypothesis verdict.

hypothesis verdict vs scoreboard outcome

The banner verdict judges this hypothesis as written. The scoreboard asks whether each school's polarity-corrected prediction was right. Raw status is not a school win: SUPPORTED supports schools that needed SUPPORTED, but refutes schools that needed REFUTED.

Austrian Business Cycle Theory (ABCT)wins if SUPPORTEDpartial/no-callChicago School Monetarismwins if SUPPORTEDpartial/no-callClassical Liberalwins if SUPPORTEDpartial/no-callDegrowth / Ecological Macroeconomicswins if REFUTEDpartial/no-callDemocratic Socialism (Bernsteinian revisionism + modern)wins if REFUTEDpartial/no-callStructuralist / Developmentalistwins if MIXEDpartial/no-callEco-Socialism / Red-Greenwins if REFUTEDpartial/no-callEmpirical Pragmatist (the framework's house position)wins if MIXEDpartial/no-callNew Institutional Economicswins if MIXEDpartial/no-callMarket Socialism (Lange-Lerner tradition)wins if REFUTEDpartial/no-callMarxian Political Economywins if REFUTEDpartial/no-callMarxism-Leninism (central-planning implementation)wins if REFUTEDpartial/no-callModern Monetary Theorywins if REFUTEDpartial/no-callNew Keynesian (mainstream synthesis)wins if MIXEDpartial/no-callOrdoliberalism (Freiburg School)wins if SUPPORTEDpartial/no-callPost-Keynesianwins if REFUTEDpartial/no-callSocial Democraticwins if REFUTEDpartial/no-call

Pre-registration

pre-registered
first-spec commit bae09ab · 2026-04-29T22:09:42Z
run generated · 2026-06-29T17:53:07Z

The US-EU GDP per capita (PPP, constant international dollars) gap has widened materially between 2000 and 2023. The gap ratio (US divided by EU-27 average) grew from approximately 1.25 in 2000 to approximately 1.45 by 2023, a divergence of ~20 percentage points. The widening is not primarily demographic (both regions age) or measurement-artefact; it is associated with specific policy-content differences: US energy- cost advantage post-2010 shale revolution, EU cumulative regulatory burden on the digital sector (GDPR 2018, DMA 2022, AI Act 2024), US capital-market depth enabling tech-sector scale that EU bank-financed systems produce less of, and EU Stability and Growth Pact constraining countercyclical fiscal response. This hypothesis establishes the divergence as a stylised fact and attempts a first-pass decomposition.

Falsification criterion — what would disprove this

set before the run · honoured after

This hypothesis is considered falsified if:

Not supported if (a) the US-EU gap ratio did not widen materially (less than 10 percentage points) between 2000 and 2023, OR (b) the gap is flat or closing rather than widening, OR (c) the widening is fully explained by demographic or measurement artefact (requires a separate demographic-decomposition robustness).

formal test & threshold
test:      us_eu_gap_trajectory_and_first_pass_decomposition
threshold: gap_2023 - gap_2000 >= 0.10 (log units)  AND post-2010 interaction coefficient > 0  AND the widening survives a demographic controls robustness

Method

Template
panel_fe
Fixed effects
country, year
Clustering
country
Sample
11 countries · 2000 – 2023
Evidence type
descriptive

Two-stage: Stage 1 (descriptive): compute log(US GDP pc PPP) − log(EU population-weighted GDP pc PPP) per year. Plot trajectory 2000-2023. Confirm widening magnitude and timing. Stage 2 (decomposition): PanelOLS with US vs EU-member country FE + year FE, interaction of US dummy with post-2010 (shale) indicator, post-2018 (GDPR-era digital regulation) indicator, post-2021 (EU energy crisis) indicator. Each interaction coefficient attributes incremental divergence to the period it names. This is explicitly a DESCRIPTIVE / DECOMPOSITION hypothesis, not a causal identification. The evidence_type reflects that — we claim to document a pattern and propose a decomposition, not to causally identify each channel's contribution.

Data

VariableSourceTransform
log_gdp_pc_ppp
outcome
world_bank_wdi:NY.GDP.PCAP.PP.KDtier 2
log
gdp_growth_rate
outcome
world_bank_wdi:NY.GDP.MKTP.KDtier 2
yoy_log_diff
log_population
control
world_bank_wdi:SP.POP.TOTLtier 2
log
urbanisation
control
world_bank_wdi:SP.URB.TOTL.IN.ZStier 2
level
trade_openness
control
world_bank_wdi:NE.TRD.GNFS.ZStier 2
level
debt_to_gdp
control
imf:GGXWDG_NGDPtier 2
level

● ready  · ● pending  · ● reconstruct-needed

Detailed result card

Result card — us_eu_divergence_decomposition

Verdict: INCONCLUSIVE_DATA_PENDING — treatment 'context_inferred_treatment' has no cross-country variation within years under year fixed effects

Pre-registration

  • Claim: The US-EU GDP per capita (PPP, constant international dollars) gap has widened materially between 2000 and 2023. The gap ratio (US divided by EU-27 average) grew from approximately 1.25 in 2000 to approximately 1.45 by 2023, a divergence of ~20 percentage points. The widening is not primarily demographic (both regions age) or measurement-artefact; it is associated with specific policy-content differences: US energy- cost advantage post-2010 shale revolution, EU cumulative regulatory burden on the digital sector (GDPR 2018, DMA 2022, AI Act 2024), US capital-market depth enabling tech-sector scale that EU bank-financed systems produce less of, and EU Stability and Growth Pact constraining countercyclical fiscal response. This hypothesis establishes the divergence as a stylised fact and attempts a first-pass decomposition.
  • Falsification rule: Not supported if (a) the US-EU gap ratio did not widen materially (less than 10 percentage points) between 2000 and 2023, OR (b) the gap is flat or closing rather than widening, OR (c) the widening is fully explained by demographic or measurement artefact (requires a separate demographic-decomposition robustness).
  • Falsification test: us_eu_gap_trajectory_and_first_pass_decomposition

Estimate

  • Error: treatment 'context_inferred_treatment' has no cross-country variation within years under year fixed effects

Variables resolved

  • world_bank_wdi:NY.GDP.PCAP.PP.KD → log_gdp_pc_ppp (outcome, publisher=world_bank_wdi, n=8325)
  • world_bank_wdi:NY.GDP.MKTP.KD → gdp_growth_rate (outcome, publisher=world_bank_wdi, n=12104)
  • world_bank_wdi:SP.POP.TOTL → log_population (controls, publisher=world_bank_wdi, n=14447)
  • world_bank_wdi:SP.URB.TOTL.IN.ZS → urbanisation (controls, publisher=world_bank_wdi, n=16965)
  • world_bank_wdi:NE.TRD.GNFS.ZS → trade_openness (controls, publisher=world_bank_wdi, n=10714)
  • imf:GGXWDG_NGDP → debt_to_gdp (controls, publisher=imf, n=8113)

Generated by scripts/run_panel_fe.py at 2026-06-29T17:53:07+00:00

Strongest opposing argument

Every hypothesis ships with its charitable opposing argument. The framework earns credibility by handling objections at their strongest, not weakest.

Notes

EU sample includes the large members + POL (as fast-grower counter- example). UK kept in but not counted as EU for aggregation (post- 2020 non-member). This is v1 — descriptive + first-pass decomposition. A v2 would introduce specific movement-level identification for energy costs (requiring IEA industrial-electricity-price fetcher), for regulatory burden (requires sector-specific metrics beyond OECD PMR), and for capital-market depth (BIS credit-flow + venture-capital-activity data — not all on disk yet).

Authored framework. Read the transparency note.