The European Economy since 1945: Coordinated Capitalism and Beyond

The European Economy since 1945: Coordinated Capitalism and Beyond

by Barry Eichengreen
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Princeton University Press
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The European Economy since 1945: Coordinated Capitalism and Beyond

In 1945, many Europeans still heated with coal, cooled their food with ice, and lacked indoor plumbing. Today, things could hardly be more different. Over the second half of the twentieth century, the average European's buying power tripled, while working hours fell by a third. The European Economy since 1945 is a broad, accessible, forthright account of the extraordinary development of Europe's economy since the end of World War II. Barry Eichengreen argues that the continent's history has been critical to its economic performance, and that it will continue to be so going forward.

Challenging standard views that basic economic forces were behind postwar Europe's success, Eichengreen shows how Western Europe in particular inherited a set of institutions singularly well suited to the economic circumstances that reigned for almost three decades. Economic growth was facilitated by solidarity-centered trade unions, cohesive employers' associations, and growth-minded governments—all legacies of Europe's earlier history. For example, these institutions worked together to mobilize savings, finance investment, and stabilize wages.

However, this inheritance of economic and social institutions that was the solution until around 1973—when Europe had to switch from growth based on brute-force investment and the acquisition of known technologies to growth based on increased efficiency and innovation—then became the problem.

Thus, the key questions for the future are whether Europe and its constituent nations can now adapt their institutions to the needs of a globalized knowledge economy, and whether in doing so, the continent's distinctive history will be an obstacle or an asset.

Product Details

ISBN-13: 9780691138480
Publisher: Princeton University Press
Publication date: 07/01/2008
Series: Princeton Economic History of the Western World Series
Edition description: New Edition
Pages: 520
Sales rank: 438,463
Product dimensions: 6.00(w) x 9.10(h) x 1.20(d)

Table of Contents





CHAPTER ONE: Introduction 1

CHAPTER TWO: Mainsprings of Growth 15

Probing Deeper 20

Institutional Foundations of the Golden Age 31

Institutions and History 40

The End of the Golden Age 47

CHAPTER THREE: The Postwar Situation 52

Reconstruction 54

The Transition to Sustained Growth 59

Normalization and the Political Economy of the Marshall Plan 64

German Economic and Monetary Reform 70

Obstacles to Integration 73

The 1949 Devaluations 77

The European Payments Union 79

CHAPTER FOUR: Dawn of the Golden Age 86

Understanding Growth in the 1950s 89

Germany as Pacesetter 93

Next in Line 97

The Laggards 118

Toward the Golden Age 129

CHAPTER FIVE: Eastern Europe and the Planned Economy 131

The Strategy of Central Planning 133

Problems of Central Planning 142

Partial Reforms 146

Planning Innovation 154

Regional Integration 155

The End of Reform 160

CHAPTER SIX: The Integration of Western Europe 163

Initial Steps 167

EFTA and the British Dilemma 176

Economic Effects 178

The Common Agricultural Policy 182

The Luxembourg Compromise 185

Inklings of Monetary Integration 187

The Common Market as an Established Fact 195

CHAPTER SEVEN: The Apex of the Golden Age 198

The Heyday of Extensive Growth 199

The Incorporation of the European Periphery 204

Wage Explosion and Labor Conflict 216

The End of the Golden Age 223

CHAPTER EIGHT: Mounting Payments Problems 225

Italy's Crisis 226

Britain's Problems 229

The French Crisis and the German Response 238

The Collapse of Bretton Woods 242

The European Response 246

CHAPTER NINE: Declining Growth, Rising Rigidities 252

The Productivity Slowdown 253

Innovation 257

Unemployment 263

Stabilization in Britain 277

The EMS Initiative 282

The EMS in Operation 286

The Legacy 290

CHAPTER TEN: The Collapse of Central Planning 294

The Survival of Central Planning 296

The Collapse of Communism 301

Recession and Adjustment 303

Dilemmas of Transition 308

Economic Response 310

German Reunification 318

Normalization and Integration 328

CHAPTER ELEVEN: Integration and Adjustment 335

The Single Market 336

Integration in Practice 341

From the Delors Report to the Maastricht Treaty 346

The EMS Crisis 357

The Transition to Monetary Union 366

EMU and Its Implications 370

Adjustment and Growth 377

CHAPTER TWELVE: Europe at the Turn of the Twenty-first Century 379

Employment and Growth 381

Reducing Unemployment 388

Implications for European Unemployment 393

Productivity Growth 398

Eastern European Prospects and Western European Implications 406

Economic Prospects 412

CHAPTER THIRTEEN: The Future of the European Model 414

Battle of the Systems 419

The Shadow of History 423

APPENDIX: Sources of Growth 427



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