The following article uses a production function approach to analyse the long-term trends of the European growth potential. It describes the possibility of a further significant decline in the potential growth rate and the mechanisms of this decline. EU Member States are divided into five...

We suppose that the dramatic decline in the European output is more than a cyclical diversion from the potential output. We performed a medium term quantitative analysis combining data based on the production function and growth accounting approach. Our results show that the erosion of the...