The Economic Agenda: A View from Europe

20 Pages Posted: 4 Jul 2004

See all articles by Karl Aiginger

Karl Aiginger

Austrian Institute of Economic Research (WIFO)


Over the course of the 1990s, the US outperformed Europe not only in output growth, but also in productivity and employment generation, thereby stopping Europe's decade-long period of catching up. The author shows that the growth difference originates at least partly from insufficient investment by Europe into the determinants of long-run growth (research, education, and the diffusion of new technologies). Northern European countries with comprehensive welfare systems performed better than the big economies in continental Europe, owing to their timely realization that these costly systems require the highest possible levels of productivity and fast growth. The European agenda for the next decade is based on this analysis. It stresses the importance of accelerating economic growth, primarily through investment into growth drivers. Labor market reforms are necessary, as is the redefinition of macroeconomic policy, a regional policy adequate for European enlargement, and reforms in the public sector. Distributional and ecological issues are also on the agenda, even though Europe outperforms the US in these fields, as is reflective of European preferences.

Suggested Citation

Aiginger, Karl, The Economic Agenda: A View from Europe. Available at SSRN:

Karl Aiginger (Contact Author)

Austrian Institute of Economic Research (WIFO) ( email )

P.O. Box 91
Wien, A-1103

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