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

Published online by Cambridge University Press:  26 March 2020

Nicholas Crafts
Nicholas Crafts*
Affiliation:
Warwick University
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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.

Keywords

Financial crisisfiscal consolidationgrowth projectionsMarshall Planproductivity growthsupply-side reformN14O52
Type
Research Articles
Information
National Institute Economic Review , Volume 224 , May 2013 , pp. R14 - R28
Copyright
Copyright © 2013 National Institute of Economic and Social Research

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Footnotes

An earlier version of this paper was presented at the inaugural CEPR-Modena conference, ‘Growth in Mature Economies’, in November 2012. I am grateful to participants for very helpful comments. The paper has also benefited from suggestions made by Dawn Holland, Simon Kirby and two anonymous referees. Remaining errors and omissions are my responsibility.

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