Kroszner, Randall S. --- "An agenda for global economic growth –European challenges" [2003] ELECD 104; in Tumpel-Gugerell, Gertrude; Mooslechner, Peter (eds), "Structural Challenges for Europe" (Edward Elgar Publishing, 2003)

Book Title: Structural Challenges for Europe

Editor(s): Tumpel-Gugerell, Gertrude; Mooslechner, Peter

Publisher: Edward Elgar Publishing

ISBN (hard cover): 9781843764748

Section: Chapter 4

Section Title: An agenda for global economic growth –European challenges

Author(s): Kroszner, Randall S.

Number of pages: 14

Extract:

4. An agenda for global economic
growth ­ European challenges
Randall S. Kroszner

EXPLORING GROWTH

This is an exciting time to be part of the economic policy process. Thanks
to recent research both inside and outside academia, policy makers have a
clearer roadmap to follow when working to improve long-run growth. The
main message of this research is that growth does not fall like manna from
heaven. Well-designed economic policy is a prerequisite for productivity
growth, which is the key source of higher living standards in the long run.
Why should all countries in Europe make growth their top economic pri-
ority? To start with, consider the potential gains for European countries
that have only recently embraced the market model. The challenge for these
countries is to close the `productivity gap', so that their economies can
deliver the higher living standards of the traditionally capitalist countries
in Europe. The policies advocated in the pro-growth agenda will help these
countries move to the productivity frontier as quickly as possible.
For developed countries, operating much closer to the productivity fron-
tier, the challenge is slightly different. For these countries, a pro-growth
agenda will ensure that their productivity frontiers grow as quickly as pos-
sible, because only productivity growth can deliver sustained increases in
long-run living standards. Growing evidence suggests that the pro-growth
orientation of American policy has played a large part in the recent
increase in US productivity growth. From 1973 to 1995, US labour produc-
tivity ...