References (42)


Citations (76)



The Economic Future of Europe

Olivier J. Blanchard

National Bureau of Economic Research (NBER); Peter G. Peterson Institute for International Economics

February 1, 2004

MIT Economics Working Paper No. 04-04

After three years of near stagnation, the mood in Europe is definitely gloomy. Many doubt that the European model has a future. In this paper, I argue that things are not so bad, and there is room for optimism.

Over the last thirty years, productivity growth has been much higher in Europe than in the United States. Productivity levels are roughly similar in the European Union and in the United States today. The main difference is that Europe has used some of the increase in productivity to increase leisure rather than income, while the U.S. has done the opposite.

Turning to the present, a deep and wide ranging reform process is taking place. This reform process is driven by reforms in financial and product markets. Reforms in those markets are in turn putting pressure for reform in the labor market. Reform in the labor market will eventually take place, but not overnight and not without political tensions. These tensions have dominated and will continue to dominate the news; but they are a symptom of change, not a reflection of immobility.

Number of Pages in PDF File: 38

Keywords: Europe, growth, deregulation, goods markets, labor markets

JEL Classification: E6, L5, J6

Open PDF in Browser Download This Paper

Date posted: February 10, 2004  

Suggested Citation

Blanchard, Olivier J., The Economic Future of Europe (February 1, 2004). MIT Economics Working Paper No. 04-04. Available at SSRN: https://ssrn.com/abstract=500183 or http://dx.doi.org/10.2139/ssrn.500183

Contact Information

Olivier J. Blanchard (Contact Author)
National Bureau of Economic Research (NBER) ( email )
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
Peter G. Peterson Institute for International Economics ( email )
1750 Massachusetts Avenue, NW
Washington, DC 20036
United States
Feedback to SSRN

Paper statistics
Abstract Views: 7,971
Downloads: 1,863
Download Rank: 5,095
References:  42
Citations:  76