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The Economic Agenda: a View from Europe

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  • Karl Aiginger

Abstract

Over the course of the 1990s, the US outperformed Europe not only in output growth, but also in productivity and employment generation, thereby stopping Europe's decade‐long period of catching up. The author shows that the growth difference originates at least partly from insufficient investment by Europe into the determinants of long‐run growth (research, education, and the diffusion of new technologies). Northern European countries with comprehensive welfare systems performed better than the big economies in continental Europe, owing to their timely realization that these costly systems require the highest possible levels of productivity and fast growth. The European agenda for the next decade is based on this analysis. It stresses the importance of accelerating economic growth, primarily through investment into growth drivers. Labor market reforms are necessary, as is the redefinition of macroeconomic policy, a regional policy adequate for European enlargement, and reforms in the public sector. Distributional and ecological issues are also on the agenda, even though Europe outperforms the US in these fields, as is reflective of European preferences.

Suggested Citation

  • Karl Aiginger, 2004. "The Economic Agenda: a View from Europe," Review of International Economics, Wiley Blackwell, vol. 12(2), pages 187-206, May.
    • Handle: RePEc:bla:reviec:v:12:y:2004:i:2:p:187-206
    DOI: 10.1111/j.1467-9396.2004.00442.x
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    References listed on IDEAS

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    1. Karl Aiginger & Michael Landesmann, 2002. "Competitive Economic Performance: The European View," WIFO Working Papers 179, WIFO.
    2. Dale W. Jorgenson & Kevin J. Stiroh, 2000. "Raising the Speed Limit: U.S. Economic Growth in the Information Age," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 31(1), pages 125-236.
    3. Giuseppe Nicoletti & Andrea Bassanini & Ekkehard Ernst & Sébastien Jean & Paulo Santiago & Paul Swaim, 2001. "Product and Labour Markets Interactions in OECD Countries," OECD Economics Department Working Papers 312, OECD Publishing.
    4. Michael Peneder, 2001. "Entrepreneurial Competition and Industrial Location," Books, Edward Elgar Publishing, number 2174, August.
    5. Karl Aiginger, 2003. "A Three Tier Strategy for Successful European Countries in the Nineties," WIFO Working Papers 205, WIFO.
    6. Ronald Schettkat, 2003. "Institutions in the Economic Fitness Landscape: What Impact Do Welfare State Institutions Have on Economic Performance?," ifo DICE Report, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 1(02), pages 27-33, October.
    7. Alberto Alesina & Edward Glaeser & Bruce Sacerdote, 2001. "Why Doesn't The US Have a European-Style Welfare State?," Harvard Institute of Economic Research Working Papers 1933, Harvard - Institute of Economic Research.
    8. Stephan Schulmeister, 2000. "Globalization without Global Money: The Double Role of the Dollar as National Currency and World Currency," Journal of Post Keynesian Economics, Taylor & Francis Journals, vol. 22(3), pages 365-395, March.
    9. Karl Aiginger, 2003. "The Relative Importance of Labour Market Reforms to Economic Growth," WIFO Working Papers 208, WIFO.
    10. Alberto Alesina & Edward Glaeser & Bruce Sacerdote, 2001. "Why Doesn't the US Have a European-Style Welfare System?," NBER Working Papers 8524, National Bureau of Economic Research, Inc.
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    1. Karl Aiginger, 2004. "The three tier strategy followed by successful European countries in the 1990s," International Review of Applied Economics, Taylor & Francis Journals, vol. 18(4), pages 399-422.
    2. Karl Aiginger, 2008. "The Impact of Competition on Macroeconomic Performance," Chapters, in: Klaus Gugler & B. Burcin Yurtoglu (ed.), The Economics of Corporate Governance and Mergers, chapter 14, Edward Elgar Publishing.
    3. Fritz Breuss, 2005. "Die Zukunft der Lissabon-Strategie," WIFO Working Papers 244, WIFO.
    4. Karl Aiginger & Alois Guger, 2005. "The European Socio-economic Model. Differences to the USA and Changes Over Time," WIFO Studies, WIFO, number 25777, June.
    5. Bruno Tissot & Les Skoczylas, 2005. "Revisiting recent productivity developments across OECD countries," BIS Working Papers 182, Bank for International Settlements.
    6. Karl Aiginger & Gunther Tichy & Ewald Walterskirchen, 2006. "WIFO White Paper: Towards Higher Employment via Economic Growth Based on Innovation and Qualification. Summary," WIFO Studies, WIFO, number 28078, June.
    7. Karl Aiginger, 2005. "Labour market reforms and economic growth – the European experience in the 1990s," Journal of Economic Studies, Emerald Group Publishing, vol. 32(6), pages 540-573, October.
    8. Karl Aiginger, 2004. "Labour Market Reforms and Economic Growth. The European Experience in the Nineties," WIFO Working Papers 232, WIFO.

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