Over Fifteen Years Apart: EU Fiscal and Monetary Policies Compared to the USA

The article presents a theoretical examination of fiscal and monetary governance in the European Union and the United States, by comparing their institutional frameworks, fiscal and monetary policy regulations, and crisis-response mechanisms. This research is grounded in a comparative analysis of the EU and the United States spanning the years 2003 to 2024. The paper integrates a literature review with statistical comparisons and Ordinary Least Squares (OLS) regression, to investigate 11 macroeconomic indicators, which include tax revenue, government expenditure, public debt, the budget balance, the money supply, interest rates, inflation, unemployment, exchange rate fluctuations, and GDP per capita, adjusted for purchasing power parity. The analysis is organised into various economic phases (pre-crisis, post-2008 adjustment, pre-pandemic and post-pandemic), to discern how both cases reacted to significant economic disturbances, and what policy variables were most closely linked to growth outcomes. The results suggest that the United States has probably achieved a superior relative economic performance, due to its policy mix characterised by lower tax burdens, more rapid fiscal adjustments and broader monetary expansion. Conversely, the European Union’s elevated tax levels, increased public spending and slower policy adjustments were correlated with lower GDP per capita growth and extended recovery periods. These findings were based on the results of high P-value and low R, as well as squared results of OLS regression. At the same time, considerations of autocorrelation and multicollinearity have been taken into account.