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.
