Economists disagree on what ails the economies of continental western Europe, which are widely perceived to be underperforming in terms of productivity and other metrics. Is it some deficiency in their economic system--in economic institutions or cultural attitudes? Is it some effect of their welfare systems of social insurance and assistance? Or are these systems healthy enough but weighed down by adverse market conditions? In this volume, leading economists test the various explanations for Europe’s economic underperformance against real-world data. The chapters, written from widely varying perspectives, demonstrate the shortcomings and strengths of some methods of economics as much as they do the shortcomings and strengths of some economies of western continental Europe. Some contributors address only income per head or per worker; others look at efficiency and distortions of national choices such as that between labor and leisure; still others look at job satisfaction, fulfillment, and rates of indigenous innovation. Many offer policy recommendations, which range from developing institutions that promote entrepreneurship to using early education to increase human capital.
About the Editors
Edmund S. Phelps is McVickar Professor of Political Economy at Columbia University and founder of Columbia’s Center on Capitalism and Society. He was the 2006 Nobel Laureate in Economics.
Hans-Werner Sinn is Professor of Economics and Public Finance at the University of Munich and President of the CESIfo Group. Author of Can Germany Be Saved? The Malaise of the World’s First Welfare State (MIT Press) and other books, he is former president of the International Institute of Public Finance, and former chairman of the German Economic Association.
"In this collection some of the most innovative economists in the profession shed new light on why continental Europe has lost its dynamism. A must read for anyone seriously interested in the complex interrelations among institutions, culture, and economic growth." Peter Howitt , Lyn Crost Professor of Social Sciences, Department of Economics, Brown University"—
"To paraphrase Winston Churchill, Europe is a riddle wrapped in a mystery inside an enigma. Its economy is neither a smashing success nor a basket case but, like any economy, something in between. This collection of careful studies combining economic theory with institutional analysis goes a long way toward unwrapping the riddle." Barry Eichengreen , George C. Pardee and Helen N. Pardee Professor of Economics and Political Science, University of California, Berkeley"—