This chapter is an assessment of the economic situation of Europe, with some concentration on those countries which have adopted the euro in 2001 and 2002 drawing on a wide variety of sources including Ifo survey data. At 1.6% in 2001 and 1.3% in 2002, these GDP growth rates are both, lower than...

This chapter addresses the weakness of the euro against the US dollar and the yen since its launch in 1999. The report stresses the effects on the euro of a dramatic decline in the demand for base money which probably reflected a flight of black money from within the euro countries as well as of...

This chapter considers the monetary and fiscal policies appropriate to Europe under the circumstances of an adverse international cycle and a weak euro. Typically, governments have medium-term plans for fiscal consolidation, “stabilisation plans”, calling for a falling trend in budget...

This chapter addresses questions about the effect of the introduction of the euro on price differentials across the Union and also on the cost of capital in its member countries, which may account for capital flows from the slow growing centre to the more buoyant peripheral states. Nominal...

This chapter compares growth in Europe and the United States in recent decades. Although Europe was, as one would expect, catching up in the 1950s and 1960s, this virtually ceased in the 1970s, and the United States has pulled further ahead in the 1980s and 1990s – and at a particularly...

This chapter argues that traditional social programmes of the modern welfare state have concentrated on replacing the earnings which are not enjoyed by those without jobs.This offers an incentive to those capable of earning only very low wages to qualify for (higher) benefits by declining jobs...

This chapter re-examines the case for reforming the Common Agricultural Policy. The health and environmental aspects of modern agriculture have been highlighted by British experience with BSE and FMD. Historically, agricultural support has been rationalised by reference to security of supply,...

Authors of the Report on the European Economy 2002

We build a two-sector dynamic general equilibrium model with one-sided substitutability between fossil carbon and biocarbon. One shock only, the discovery of the technology to use fossil fuels, leads to a transition from an initial pre-industrial phase to three following phases: a pure fossil...