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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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    2. Karl Aiginger & Michael Landesmann, 2002. "Competitive Economic Performance: The European View," WIFO Working Papers 179, WIFO.
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    6. Michael Peneder, 2001. "Entrepreneurial Competition and Industrial Location," Books, Edward Elgar Publishing, number 2174, June.
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    1. 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.
    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.
    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.
    7. Karl Aiginger, 2004. "Labour Market Reforms and Economic Growth. The European Experience in the Nineties," WIFO Working Papers 232, WIFO.
    8. 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.

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