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Is the Eurozone an Engine of Growth for Indiana?

November 8, 2010

One way to stimulate economic growth is to increase exports, and recently both President Obama and Indiana Governor Mitch Daniels have gone on trade trips to Asia.  However, Indiana export data suggests that it will be Europe that fuels economic growth for the Hoosier state in the near future.  As the below graphs shows, Indiana is on pace export a record value of goods to Europe in 2010, based on data from the first half of 2010.  If the current trend continued, the state will export about $7.9 billion to the 27 members of the EU, including $5.8 billion to the 16 EU countries that use the euro.

This would be about $1.3 billion more than 2009 in both categories.  To put it in comparison, Indiana exported a $0.86 billion to China, $0.82 billion to Japan, and $0.43 billion to South Korea  in 2009.  Thus, while China may have 800 million more people than the EU, Indiana’s economic ties remain much stronger with its traditional European trading partners.  In addition, the below charts shows that Indiana’s exports to the Eurozone have actually continued to expand since 2002, despite the global recession and the recent plight of the euro.

While part of the difference between the EU27 and the Eurozone can probably be explained by the changing economic ties between Indiana and the UK (which is the largest EU economy not in the Eurozone), it is still interesting that trade with the Eurozone has consistently grown faster than that with the European Union as a whole.  As a result, perhaps one can ask if the Eurozone could be an engine for Indiana’s recovery.  In order to examine this question, the IU European Union Center is sponsoring the “Euro and its effects on the Midwest” to discuss such questions.

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