Prospects for growth in the Euro area
AbstractWe review the recent performance of the Euro area economy, focusing in detail on the separate roles played by labour input, capital input, and total factor productivity (TFP). After a long period of catching up with US levels of labour productivity, Euro area productivity growth has, since the mid-1990s, fallen significantly behind. We show that this recent divergence has accelerated since 2000, and that this is mainly due to the poor rate of Euro area TFP growth. Based on prevailing trends, we estimate that potential output growth in the Euro area currently may be running as low as 1.5 percent per year. In addition, if TFP growth stays at recent levels, the output growth rate will decline further due to weaker capital deepening. To consider future Euro area prospects for growth, we examine a set of alternative scenarios, each of which posits a potential increase in a determinant of output growth. One of these scenarios focuses on the potential effects of greater labour market deregulation.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by University College Dublin in its series Open Access publications from University College Dublin with number urn:hdl:10197/217.
Date of creation: Nov 2006
Date of revision:
Contact details of provider:
Web page: http://www.ucd.ie
Economic development--European Union countries; Industrial productivity--European Union countries; Labor market--European Union countries;
Other versions of this item:
- O10 - Economic Development, Technological Change, and Growth - - Economic Development - - - General
- O52 - Economic Development, Technological Change, and Growth - - Economywide Country Studies - - - Europe
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Fagan, Gabriel & Henry, Jérôme & Mestre, Ricardo, 2001. "An area-wide model (AWM) for the euro area," Working Paper Series 0042, European Central Bank.
- Edward C. Prescott, 2004.
"Why do Americans Work so Much More than Europeans?,"
NBER Working Papers
10316, National Bureau of Economic Research, Inc.
- Edward C. Prescott, 2004. "Why do Americans work so much more than Europeans?," Quarterly Review, Federal Reserve Bank of Minneapolis, issue Jul, pages 2-13.
- Edward C. Prescott, 2004. "Why Do Americans Work So Much More Than Europeans?," Levine's Bibliography 122247000000000413, UCLA Department of Economics.
- Edward C. Prescott, 2003. "Why do Americans work so much more than Europeans?," Staff Report 321, Federal Reserve Bank of Minneapolis.
- Sapir, Andre & Aghion, Philippe & Bertola, Giuseppe & Hellwig, Martin & Pisani-Ferry, Jean & Rosati, Dariusz & Vinals, Jose & Wallace, Helen, 2004.
"An Agenda for a Growing Europe: The Sapir Report,"
Oxford University Press, number 9780199271498.
- André Sapir & Philippe Aghion & Giuseppe Bertola & Martin Hellwig & Jean Pisani-Ferry & Bernard Lange & José Viñals & Helen Wallace & Marco Buti & Mario Nava & Peter Smith, 2004. "An agenda for a growing Europe: the Sapir report," ULB Institutional Repository 2013/8070, ULB -- Universite Libre de Bruxelles.
- Schwerdt, Guido & Turunen, Jarkko, 2006.
"Growth in Euro Area Labour Quality,"
CEPR Discussion Papers
5509, C.E.P.R. Discussion Papers.
- Whelan, Karl, 2002. "A Guide to U.S. Chain Aggregated NIPA Data," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 48(2), pages 217-33, June.
- Robert E. Hall & Charles I. Jones, 1999.
"Why Do Some Countries Produce So Much More Output Per Worker Than Others?,"
The Quarterly Journal of Economics,
MIT Press, vol. 114(1), pages 83-116, February.
- Robert E. Hall & Charles I. Jones, 1999. "Why Do Some Countries Produce So Much More Output per Worker than Others?," NBER Working Papers 6564, National Bureau of Economic Research, Inc.
- Alberto Alesina & Edward L. Glaeser & Bruce Sacerdote, 2005.
"Work and Leisure in the U.S. and Europe: Why So Different?,"
NBER Working Papers
11278, National Bureau of Economic Research, Inc.
- Alberto F. Alesina & Edward L. Glaeser & Bruce Sacerdote, 2006. "Work and Leisure in the U.S. and Europe: Why So Different?," NBER Chapters, in: NBER Macroeconomics Annual 2005, Volume 20, pages 1-100 National Bureau of Economic Research, Inc.
- Alberto Alesina & Edward Glaeser & Bruce Sacerdote, 2005. "Work and Leisure in the U. S. and Europe: Why so Different?," Harvard Institute of Economic Research Working Papers 2068, Harvard - Institute of Economic Research.
- Alesina, Alberto F & Glaeser, Edward L & Sacerdote, Bruce, 2005. "Work and Leisure in the US and Europe: Why So Different?," CEPR Discussion Papers 5140, C.E.P.R. Discussion Papers.
- Olivier Blanchard, 2004.
"The Economic Future of Europe,"
NBER Working Papers
10310, National Bureau of Economic Research, Inc.
- Lawless, Martina, 2006. "Measurement Issues and Int. Comparisons of Output and Productivity Growth," Quarterly Bulletin Articles, Central Bank of Ireland, pages 108-120, April.
- Angela Maddaloni & Alberto Musso & Philipp Rother & Melanie Ward-Warmedinger & Thomas Westermann, 2006. "Macroeconomic implications of demographic developments in the euro area," Occasional Paper Series 51, European Central Bank.
- McQuinn, Kieran & Whelan, Karl, 2006.
"Conditional Convergence Revisited: Taking Solow Very Seriously,"
Research Technical Papers
7/RT/06, Central Bank of Ireland.
- McQuinn, Kieran & Whelan, Karl, 2006. "Conditional convergence revisited : taking Solow very seriously," Open Access publications from University College Dublin urn:hdl:10197/242, University College Dublin.
- Alberto Musso & Thomas Westermann, 2005. "Assessing potential output growth in the euro area - a growth accounting perspective," Occasional Paper Series 22, European Central Bank.
- Lawless, Martina, 2006. "Measurement Issues and International Comparisons of Output and Productivity Growth," MPRA Paper 10007, University Library of Munich, Germany.
- Karl Whelan, 2010.
"Policy Lessons from Ireland’s Latest Depression,"
The Economic and Social Review,
Economic and Social Studies, vol. 41(2), pages 225-254.
- Linehan, Suzanne & McQuinn, Kieran, 2008. "A Sectoral Analysis of the Average Work Week in Euro Area Countries," Quarterly Bulletin Articles, Central Bank of Ireland, pages 68-88, October.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Joseph Greene).
If references are entirely missing, you can add them using this form.