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Long-Term Growth in Europe: What Difference does the Crisis Make?

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  • Crafts, Nicholas

Abstract

OECD projections for European countries imply that the crisis will have no long-term effect on trend growth. An historical perspective says this is too optimistic. Not only is the legacy of public debt and its requirement for fiscal consolidation unfavourable but the experience of the 1930s suggests that much needed supply-side reforms are now less probable – indeed policy may well become less growth friendly. Whereas the 1940s saw the Bretton Woods agreement and the Marshall Plan pave the way for the ‘Golden Age’, it is unlikely that anything similar will rescue Europe this time around.

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  • Crafts, Nicholas, 2013. "Long-Term Growth in Europe: What Difference does the Crisis Make?," National Institute Economic Review, National Institute of Economic and Social Research, vol. 224, pages 14-28, May.
    • Handle: RePEc:cup:nierev:v:224:y:2013:i::p:r14-r28_11
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    2. Dieppe,Alistair Matthew & Kilic Celik,Sinem & Okou,Cedric Iltis Finafa, 2020. "Implications of Major Adverse Events on Productivity," Policy Research Working Paper Series 9411, The World Bank.
    3. Nicholas Crafts, 2014. "Ireland’s Medium-Term Growth Prospects: a Phoenix Rising?," The Economic and Social Review, Economic and Social Studies, vol. 45(1), pages 87-112.
    4. Nicholas Oulton, 2013. "Medium and long run prospects for UK growth in the aftermath of the financial crisis," Discussion Papers 1307, Centre for Macroeconomics (CFM).
    5. Barry Eichengreen, 2015. "Wall of Worries: Reflections on the Secular Stagnation Debate," IMES Discussion Paper Series 15-E-05, Institute for Monetary and Economic Studies, Bank of Japan.

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    JEL classification:

    • N14 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - Europe: 1913-
    • O52 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Europe

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