In Discussion Paper No. 1095, Research Fellows Nicholas Crafts and Gianni Toniolo survey the literature on growth in Western Europe since 1950, putting the experience in the context both of long-run historical trends and the ideas emanating from recent work in growth economics. The paper argues that a central feature of the post-war period has been `catch-up growth' involving a narrowing of productivity gaps between leaders and followers and a reduction in the dispersion in income per person. A strong inverse correlation within Europe between initial income levels in 1950 and subsequent growth is apparent. Although recovery and reconstruction were a part of the process, catch-up growth is seen as central to this period but not to be a pure neo-classical phenomenon. The `post-war settlement' in both its domestic and international aspects seems to have been central.

It is argued that while current models and empirical techniques allow more plausible insights than older theories, they are not yet complete tools to an understanding of the Golden Age (1950-73), and the subsequent slowdown. It is suggested that future research needs to examine more carefully proxies for human capital formation and to stress the need to consider ex-ante returns in investment/growth outcomes.

Post-war Growth: An Overview
Nicholas FR Crafts and Gianni Toniolo