The Lack of European Productivity Growth: Causes and Lessons for the U.S.

31 Pages Posted: 24 Sep 2018

See all articles by Jesús Fernández-Villaverde

Jesús Fernández-Villaverde

University of Pennsylvania - Department of Economics; National Bureau of Economic Research (NBER)

Lee E. Ohanian

University of California, Los Angeles (UCLA) - Department of Economics; National Bureau of Economic Research (NBER)

Date Written: September 7, 2018

Abstract

This paper draws lessons from post-World War II Western European economic performance for the current U.S. economy. We document that much of Western Europe grew very quickly from the end of World War II up to the mid-1970s, reflecting policies that incentivized technology adoption and investment in physical and human capital. But since then, European policies have changed considerably, with higher tax rates and increased regulatory barriers that have reduced competition and new business formation. We discuss how the U.S. has shown signs of becoming like Europe over the last decade, and argue why policy reforms are key to restoring U.S. growth.

Keywords: Productivity growth, Europe's economic performance, economic policy

JEL Classification: E02, E30, E60

Suggested Citation

Fernández-Villaverde, Jesús and Ohanian, Lee E., The Lack of European Productivity Growth: Causes and Lessons for the U.S. (September 7, 2018). PIER Working Paper No. 18-024. Available at SSRN: https://ssrn.com/abstract=3253254 or http://dx.doi.org/10.2139/ssrn.3253254

Jesús Fernández-Villaverde (Contact Author)

University of Pennsylvania - Department of Economics ( email )

3718 Locust Walk
160 McNeil Building
Philadelphia, PA 19104
United States
215-898-1504 (Phone)
215-573-2057 (Fax)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Lee E. Ohanian

University of California, Los Angeles (UCLA) - Department of Economics ( email )

Box 951477
8283 Bunch Hall
Los Angeles, CA 90095-1477
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Register to save articles to
your library

Register

Paper statistics

Downloads
44
Abstract Views
195
PlumX Metrics