Europe’s Productivity Slowdown Revisited: A Comparative Perspective to the United States

This chapter shows there are clear signs that the way out of the 2008–9 crisis has become much more difficult because of the structural slowdown of Europe’s economies. Most European countries have exhibited a significant slowdown in their long-term trend growth, driven by primarily slower employment growth and weak productivity. Policy attention needs to shift to a more medium-term focus on reigniting growth, especially now that it turns out we may have entered a longer period of moderate growth. On various occasions, this chapter has also demonstrated the large diversity in performance. While in part explained by the composition of their sectoral economic activities, this diversity also suggests that that 1) there is no unique ‘European’ problem making growth more difficult than elsewhere in the advanced world, and 2) there are lessons to be learned from more and less successful growth strategies within Europe.