January 18, 2013

Europe Puts Faith in Supply-side Economics

Centre for European Reform, Centre for European Reform

AP Photo

 

Supply-side thinking now dominates European economic policy. Most governments, and the European Commission, argue that attempts to boost demand would be counterproductive, achieving little but a delay to the necessary consolidation of public finances. With close to unanimity, they believe that structural reforms offer the only hope for depressed European economies: these reforms will improve competitiveness and confidence, leading to stronger growth, a rebalancing of trade between European countries and sustainable public finances. But are policy-makers and the Commission putting excessive faith in the power of structural reforms? Is there a risk that a strategy weighted so heavily towards supply-side measures could actually end up further eroding Europe's growth potential?...

Read Full Article ››

TAGGED: Eurozone, global economy

RECOMMENDED ARTICLES

January 14, 2013
2013 Index of Economic Freedom
Heritage Foundation
A comprehensive look at the state of economic freedom around the world. more ››
January 15, 2013
Asia's Fading Economic Miracle
Centre for European Reform
Prediction is not destiny. Without vigorous reforms and stronger institutions, many Asian economies will struggle to transform themselves from middle income to wealthy countries. more ››
January 15, 2013
Whoops, There Goes Another China Myth
Daniel W. Drezner
One of this blog's annoying tics persistent themes has been its insistence that the 2008 financial crisis did not, in fact, doom the United States to a future of inevitable decline. Indeed, there are many reasons to be... more ››
January 9, 2013
Greece, Spain Turning into Failed States
Robin Shepherd, Commentator
Jobless rates in Spain and Greece have reached staggering proportions. And as long as these countries retain the euro, the prospects of recovery are slim. more ››
ALL appears (relatively) quiet in Europe these days. Political battles have been subdued in recent months and bond yields have been surprisingly well behaved at levels that are almost tolerable. Calm has yet to produce growth,... more ››