Long-Term Growth in Europe: What Difference does the Crisis Make?

Crafts, Nicholas

doi:10.1177/002795011322400102

Cited by 24 publications

(3 citation statements)

References 84 publications

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“…Banking and currency crises have tended to be associated with subsequent reductions in labor productivity of between 5 percent and 7 percent in EMDEs after three years. This is consistent with other studies in the literature, although some suggest that the effects of banking crises are often short-lived (Barro 2001;Crafts 2013;Demirgüç-Kunt, Detragiache, and Gupta 2006;Morris and Shin 1998;Obstfeld 1996; Reinhart and…”

Section: B Effects Of War Episodes On Tfp a Effects Of War Episodes On Labor Productivitysupporting

confidence: 91%

Global Productivity: Trends, Drivers, and Policies

Dieppe

2020

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Productivity growth is the key driver of sustainable income growth and poverty reduction. Its effects on human welfare are enormous. While economists agree on the importance of productivity, its measurement and drivers remain elusive. We sometime refer to productivity as a "residual" or even as a "measure of our ignorance." This important book analyzes the trends and drivers of productivity growth, with a special focus on emerging and developing countries. It uses state-ofthe-art econometric techniques and brings together the analysis of a wide range of productivity drivers which, so far, have been analyzed in isolation. It also discusses the impact of COVID-19 on productivity growth. Reading this book will help in reducing our ignorance on the most important driver of human well-being.

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Section: B Effects Of War Episodes On Tfp a Effects Of War Episodes On Labor Productivitysupporting

confidence: 91%

Global Productivity: Trends, Drivers, and Policies

Dieppe

2020

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“…But it may be that the way the Japanese government dealt with the crisis, by large fiscal stimuli leading to a high and still growing debt-GDP ratio, has also played a role in reducing long run growth. This may in fact be an illustration of the point made by Crafts (2013), that the long run effects of financial crises depend very much on how policy responds, and these responses may either promote or hinder growth (see also Broadberry and Crafts, 1992).…”

Section: Japan After the Bubble Burst In 1990mentioning

confidence: 97%

Prospects for UK growth in the aftermath of the financial crisis

Oulton¹

2016

The UK Economy in the Long Expansion and Its Aftermath

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The productivity performance of the UK economy in the period 1990-2007 was excellent. Based entirely on pre-crisis data, and using a two-sector growth model, I project the future growth rate of GDP per hour in the market sector to be 2.61% p.a. But the financial crisis and the Great Recession which began in Spring 2008 have dealt this optimistic picture a devastating blow. Both GDP and GDP per hour have fallen and are still below the level reached at the peak of the boom. So I discuss a wide range of hypotheses which seek to explain the productivity collapse, including the impact of austerity. Most of the conclusions here are negative: the explanation in question doesn't work. I next turn to the long run impact of financial crises, particularly banking crises, on productivity, capital, TFP and employment. Based on a crosscountry panel analysis of 61 countries over 1950-2010, I argue that banking crises generally have a long run impact on the level of productivity but not necessarily on its long run growth rate. I therefore predict that the UK will eventually return to the growth rate predicted prior to the crisis. This prediction is conditional on the UK continuing to follow good policies in other respects, in particular not allowing the government debt-GDP ratio to rise excessively. Nonetheless the permanent reduction in the level of GDP per worker resulting from the crisis could be substantial, about 5½%. The crosscountry evidence also suggests that there are permanent effects on employment, implying a possibly even larger hit to the level of GDP per capita of about 9%.

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“…The European Commission utilises an extended production function as a means to forecast the budgetary costs of ageing (European Commission 2012). Growth accounting techniques on the basis of identities (for further discussion see Section 2) were used, e.g., by Crafts (2013), who showed underlying factors behind the growth differential between the EU-15 countries and the US in various time periods from 1950 to 2007. Table 1 presents a first overview of the causes of growth differentials among EU countries by means of contributions to real GDP growth using national accounts aggregates.…”

Section: Introduction and Stylised Factsmentioning

confidence: 99%

The causes of post-2009 differences in the economic performance of EU countries

Maleček

2015

Acta Oeconomica

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This study examines the causes of the rather dissimilar development of individual EU economies after the 2008/09 crisis. The initial elemental analysis of contributions to GDP growth is followed by a growth accounting exercise, with decomposition into the effects of movements in total factor productivity, capital stock, and several labour market indicators. The subsequent section then seeks to clarify to what extent this development was driven by changes in cyclical conditions and the potential product.

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Long-Term Growth in Europe: What Difference does the Crisis Make?

Cited by 24 publications

References 84 publications

Global Productivity: Trends, Drivers, and Policies

Global Productivity: Trends, Drivers, and Policies

Prospects for UK growth in the aftermath of the financial crisis

The causes of post-2009 differences in the economic performance of EU countries

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