Potential growth in the EU and the global economy: New analytical insights & prospects from ageing and catching-up

Last year's International Collaboration Project had helped to highlight several key determinants of potential growth in the European Union (EU): basing upon growth accounting techniques, the main difference between the EU and the US had been shown not to rest on total factor productivity levels but, rather, on inputs per capita and, more specifically, on low employment levels in the EU. With this peculiar result in mind, investigating the bad employment performance of the EU had been the second step of last year's Project: the main result had been that EU policymaking design was flawed and that prospects for growth would be improving only insofar as institutions like fiscal policy, the EU budget and monetary policy would be reformed. Finally, we had investigated the consequences of the last EU enlargement on the EU newcomers and on the other EU members. We had shown that the weight of these newcomers was so low that these countries could not be considered as a burden for the EU (...).