DP2861 Structural Change and Europe's Golden Age

Author(s):	Jonathan Temple
Publication Date:	June 2001
Keyword(s):	growth accounting, labour reallocation, Structural Change
JEL(s):	O52
Programme Areas:	International Macroeconomics
Link to this Page:	cepr.org/active/publications/discussion_papers/dp.php?dpno=2861

Most of the countries of Western Europe grew at unprecedented rates from the late 1940s until the early 1970s. Another feature of this period was dramatic structural change, as employment shifted from agriculture to manufacturing and services. This Paper uses growth accounting to measure the direct contribution of structural change to aggregate productivity growth. The conventional accounting framework is extended and then applied to Western Europe and the USA for the period 1950-90. The Paper quantifies the importance of structural change in explaining the Golden Age, the productivity slowdown, and the cross-country variation in post-war growth rates.