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Economic Growth in Europe Since 1945. Edited by Nicholas Crafts and Gianni Toniolo. Cambridge, U.K: Cambridge University Press, 1996.624 pp. $80.00 (hardback), $35.95 (paperback). ISBN 0-521-49627-6 (hardback); 0-521-49964-X (paperback).
David Cleeton Oberlin College
This volume takes a comprehensive approach to postwar growth in Europe. Blending applied economics, economic history, and institutional analysis, it combines new growth theory modeling with empirical techniques to illuminate the unsteady record of European economic growth over the past four decades.
The introductory chapter summarizes the growth statistics for Europe during the postwar period and offers an overview of the explanatory power of total factor productivity (TFP) and new growth models. Human capital investment increasingly contributed to growth through the early 1970s. Trade liberalization and demand stabilization (which facilitated technology transfer and raised investment returns) were also important. A few general studies are then followed by many country-specific case studies.
Barry Eichengreen examines postwar institutional developments and seeks to explain the golden era of European growth from the end of World War II until around 1973. His central thesis is that a cooperative game was played between labor and capital. Wage restraint was traded for internally-funded investment and dividend restraint. In addition, multilateral agreements guaranteed international access to supplies and markets for exports, which boosted productivity and investment.
Andrea Boltho examines the postwar records from France, Italy, Spain, and Germany, searching for persistent effects from competitive devaluations and trade liberalization. The evidence she presents is very limited and not subject to regorous testing. Her analysis lacks enough structure to pose more than an invitation for others to search for the effects of hysteresis.
Charles Bean and Nicholas Crafts examine what caused slow growth in Britain relative to other European countries from the...