Type

Report

Authors

Kieran McQuinn
Karl Whelan

Subjects

Economics

Topics
labour market growth rate total factor productivity productivity growth labor market european union countries economic development european union countries euro area industrial productivity european union countries

Prospects for growth in the Euro area (2006)

Abstract We review the recent performance of the Euro area economy, focusing in detail on the separate roles played by labour input, capital input, and total factor productivity (TFP). After a long period of catching up with US levels of labour productivity, Euro area productivity growth has, since the mid-1990s, fallen significantly behind. We show that this recent divergence has accelerated since 2000, and that this is mainly due tothe poor rate of Euro area TFP growth. Based on prevailing trends, we estimate that potential output growth in the Euro area currently may be running as low as 1.5 percent per year. In addition, if TFP growth stays at recent levels, the output growth rate will decline further due to weaker capital deepening. To consider future Euro area prospects for growth, we examine a set of alternative scenarios, each of which posits a potential increase in a determinant of output growth. One of these scenarios focuses on the potential effects of greater labour market deregulation.
Collections Ireland -> University College Dublin -> School of Economics
Ireland -> University College Dublin -> College of Social Sciences and Law
Ireland -> University College Dublin -> Economics Research Collection

Full list of authors on original publication

Kieran McQuinn, Karl Whelan

Experts in our system

1
Kieran McQuinn
University College Dublin
Total Publications: 5
 
2
Karl Whelan
University College Dublin
Total Publications: 69