A new economic history argues that Europe's institutions must adapt if the continent is to thrive in future
There are, writes Barry Eichengreen, two popular views of the European economy: it is either a “phoenix” or a “basket case”. The optimists point out that after the second world war, west Europeans produced only half as much per hour as Americans did; now Europe's average is not far below America's and some countries, notably France, do even better. Since the turn of the century, the euro zone has created more jobs than the United States.
The gloom-mongers scoff that American productivity has outstripped Europe's in the past decade. They run through the familiar litany of Europe's failings: high unemployment, despite all those new jobs; rigid markets for goods, services and labour; and burdensome taxes.
You can perhaps reconcile these two extremes, suggests Mr Eichengreen, if you choose your periods carefully. Compare the end of the last century with the middle of it, “and there is no disputing the phoenix view.”
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