Twenty-First-Century Perspectives

In retrospect, 2000 to 2008 may very well turn out to be viewed as the last years during which Western economies did reasonably well before the storm to come. At least on the surface, in the USA and Europe economic performance seemed satisfactory and relatively stable, as the US economy, helped by rapid rises in the value of housing, recovered from the dot-com boom and bust of the late 1990s and several economies in Europe boomed on the strength of low Eurozone interest rates. Inflation everywhere was low, averaging 2.3 per cent in the USA and 2.1 per cent in Europe. 1 In many countries property values, thanks to historically low interest rates, increased markedly, making property owners feel richer. From 2002 to 2007 average UK house prices rose 90 per cent, 2 and over 200 per cent in Ireland between 1997 and 2007. 3 Stock exchanges recovered strongly. In the USA the Dow Jones Industrial Average almost doubled between 2002 and 2007, 4 with similar increases in Europe. The euro, established in 1998 as the constituent currencies were locked together and the currency in day-to-day use throughout the Eurozone since 2001, appeared to have got off to a good start. Living standards rose, too, although averages could be misleading. A very high proportion of increased GDP everywhere, particularly the USA, went to the already well off.