Growth and Employment in Europe: Sustainability and Competitiveness, Department of Economics, WU (Wirtschaftsuniversität Wien)
The Role of Macroeconomic Policy in Overcoming Slow Economic Growth - International Comparisons and Policy Perspectives
Abstract: A fundamental point of this paper is, that - given
existing structures (!) - the persistent problem of high unemployment in
Europe cannot be attributed to tendencies in "jobless-growth" but is mainly
caused by the fact that GDP-growth has been - and is still too low. This
argument is first based on the pronounced cyclical reagibility of
employment and unemployment. A first glance at Figure 1 immediately reveals
this cyclical reagibility of European labour-markets - which is, however
combined with "hysteresis-effects", thus creating a tendency of increasing
long-term unemployment. In the next section the question as to why
growth-rates in the 80s and 90s were much lower than compared to the 60s
and 70s will be studied. The connections between employment and economic
growth will be discussed in more detail in section 3 of this paper.
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