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

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  • Nicholas Crafts

    (Warwick University.)

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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Bibliographic Info

Article provided by National Institute of Economic and Social Research in its journal National Institute Economic Review.

Volume (Year): 224 (2013)
Issue (Month): 1 (May)
Pages: R14-R28

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Handle: RePEc:sae:niesru:v:224:y:2013:i:1:p:r14-r28

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Keywords: Financial crisis; fiscal consolidation; growth projections; Marshall Plan; productivity growth; supply-side reform;

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References

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Cited by:
  1. Crafts, Nicholas & O’Rourke, Kevin Hjortshøj, 2014. "Twentieth Century Growth*This research has received funding from the European Research Council under the European Union’s Seventh Framework Programme (FP7/2007-2013) / ERC grant agreement no. 249546," Handbook of Economic Growth, in: Handbook of Economic Growth, edition 1, volume 2, chapter 6, pages 263-346 Elsevier.
  2. 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).

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