20 Dec 2016

Structural Reforms as a Panacea? The European Productivity and Growth Puzzle

Daniel Gros

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Daniel Gros has contributed a policy analysis to the Forum section of the latest issue (November-December 2016) of Intereconomics, which is devoted to the broad question of “New Growth for Europe – On Investment, Crisis Management and Growth Potential”. It can be downloaded, along with other contributions on this same question, at https://www.ceps.eu/content/intereconomicsvol-51-no6-novemberdecember-2016

In his article, Gros calls for a more active policy towards improving productivity, since neither cheap money nor structural reforms have shown the desired effects thus far. Not surprisingly, Gros points to a lack of investment as one of the main causes for low growth. Citing a list of growth initiatives launched in the last two decades, he argues that although impressive progress has been made with regard to structural reform, very little of this has turned up in the growth and productivity figures. He concludes that more investigation into the causes of the current stagnation is needed before policymakers call for more structural reforms.

Daniel Gros is Director of CEPS. His article is republished on the CEPS website with the kind permission of Project Syndicate.