DP8827 Western Europe's Growth Prospects: an Historical Perspective

Author(s): Nicholas Crafts
Publication Date: February 2012
Keyword(s): catch-up growth, general purpose technology, social capability, supply-side policy
JEL(s): N14, O52
Programme Areas: International Macroeconomics
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=8827

This paper surveys the recent economic history of Western European growth. It concludes that this experience has been disappointing and that further reforms are desirable in many countries. The requirement for reform comes both from achieving 'close-to-frontier' status and from the opportunities provided by the new technological era. The paper goes on to consider the effects that the current crisis may have on medium-term growth rates. The lesson from the 1930s is that, if the current crisis leads to a similarly bad downturn, the policy reaction in terms of greater state intervention will not be conducive to improved growth prospects.