Economic Growth In Europe Since The 20th Century, 90 Years

In face of aging society, information revolution, economic globalization, and other challenges, European Union's (EU) economic growth has being disappointing since 1990s. The source of EU's economic growth has provoked an ongoing debate among foreign scholars, whose views can be classified into two kinds: the first one suggests that EU's economy might be unable to achieve a shift from traditional industrial structure to innovation-based economy structure; the second one is that part of the explanations for EU's poor economy performance could be measurement problems and adjustment lags, because negative effects of EU's reform are visible in short term. The existing studies about EU's economic growth by domestic scholars are not much, and most studies analysis short term growth from demand side. This dissertation is aimed to make a study on EU's economy growth from a systematic and deepening perspective based on previous researches. Whether aiming for understanding the EU's economy or serving the reform of Chinese economy, this research has significant practical and theoretical meaning.In this dissertation, the author tries to study from three aspects. The first one is to study the stylized facts of EU's economy growth since 1990s. The second one is to analysis the root of EU economy growth from three ways: the effect of European model on economic growth; the contributions of factors input on EU's economic growth; the determinants of EU's total factor productivity growth (TFP), which is also called as technical progress. The third one is to reviews structural reforms and analysis the effect of structural reforms on EU's economic growth since the fulfilling of Lisbon strategy. The methods in this research include Comparison analysis, Shift-Share analysis, Growth Accounting analysis, Malmquist index, Panel data analysis and so on.Based on the above analysis methods, the conclusions are as following: (1) Firstly, EU's GDP or GDP per capita annual growth rate is not only lower than ever, but also than US since 1990s. Using the Shift-share analysis method to study the economic growth, EU-US economic growth gap is more from industry growth contribution, which mainly include electrical and optical equipment, financial internidiate, and distribution and so on. (2) Secondly, macroeconomic stability, economic and social cohesion are characteristics of European model, which are the preconditions of EU's economic growth. EU price stability-reflected in low rates of inflation- is perhaps harmful to short-term economic growth, but facilitate achieving higher economic growth over long term. Fiscal discipline is detrimental to short term growth, but conductive to long term growth. Economic and social cohesion is to reduce inequality of personal incomes or regional development, through various redistribution policies. From empirical analysis, EU's cohesion is beneficial to increase economic growth since 1990s. (3) Thirdly, from factor decomposition aspect, it is ICT capital contribution and TFP growth which contribute mostly to EU's poor economic growth performance since 1990s. From the industry level, EU's electrical and optical equipment, financial intermediation, and distribution and other service sectors TFP growth are relatively lower comparing to US. (4) Fourthly, EU's technical progress is more relying on innovation but not imitation since 1990s. The innovation rate depends on the resource devoted to the innovate effort, such as R&D and human capital. In addition, level of regulation is potentially critical driving force for innovation. Regression results indicate that the determinants of technical progress are including R&D, human capital, product market regulation, labor market regulation, and financial market regulation and so on. The main resource of EU's slow technical progress since 1990s are ?less R&D activity, lower human capital level, more regulation of product market, inflexible labor market, and bigger disparity of financial market regulation. (5) Fifthly, Lisbon Strategy was adopted by the European Council in the spring of 2000, which aims to increase EU's productivity and economic growth through a list of reforms. Since the fulfilling of Lisbon strategy reforms, employment rate has been increasing, which help to increase the contribution of labor input on EU's potential economic growth. But as a result of not sufficient implement of structural reforms, the slow technical progress has not been improved obviously, which lead to the poor labor productivity performance.European Commission has proposed"Europe 2020"strategy for the next ten years this March, which continues to consider innovation as the engine of economic growth. Once the transition of the EU's enonomy from traditional economy to innovation-based economy would complete, EU's economic growth will pick up.