His books include Golden Fetters: The Gold Standard and the Great Depression, 1919-1939 and Globalizing Capital: A History of the International Monetary System Princeton. Challenging standard views that basic economic forces were behind postwar Europes 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. In particular, the Common Market was established and came into operation, and the acceptance of an increasing degree of currency convertibility created new incentives to sustain investment and to engage in riskier ventures. In 1945, many Europeans still heated with coal, cooled their food with ice, and lacked indoor plumbing. Extensive growth requires adopting existing technology, using labor more efficiently and generating high levels of investment. Pardee Professor of Economics and Political Science at the University of California, Berkeley. Southern Europe grew faster than Northern Europe.
The centrally planned economies were particularly inept at innovation, since new knowledge generally bubbles up from below rather than raining down from above. For example, these institutions worked together to mobilize savings, finance investment, and stabilize wages. The Princeton Economic History of the Western World. Modern industry had developed later on the continent than in Britain and the United States, at a time when the capital intensity of industrial technology was greater. By the early 1970s, however, the potential for extensive growth had been largely exhausted. And none could be bigger than the one contained in this book. He is a regular monthly columnist for Project Syndicate.
The book is an eloquently written analysis of how the economic and governmental institutions that formerly undergirded European economic growth have become, since the early 1970s, severe impediments to its growth. That is, we are doing the same thing as Google, only within the framework of one subject. To be sure, no single explanation for these complex phenomena can possibly be complete. Less defense spending allowed Western European countries to devote more government revenues and investment to private ends. 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. In 1945, many Europeans still heated with coal, cooled their food with ice, and lacked indoor plumbing.
The institutional key to understanding Europes economic development is actually the more interesting and possibly controversial element of the volume, and it is a pity that the author refers to this thesis only occasionally, without developing it in a fully articulated theory. Among other things, they saw the development of Lucite, Teflon, and nylon, improvements in the design of the internal combustion engine, and organizational changes such as the spread of assembly-line methods and modern personnel-management practices. Today, things could hardly be more different. Now the role of finance was to take bets on competing technologies, something for which financial markets were better adapted. But a depressed investment climate and then the disruptions of war made the 1930s and 1940s less than propitious times for Europe to emulate America's example. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher. To a large extent it was inherited from the past.
A careful analysis of the logical consistency of Eichengreens thesis lies beyond the scope of this review. As the early opportunities for catch-up and convergence were exhausted, the continent had to find other ways of sustaining its growth. The institutions of the command economy had severe limitations, as we will see, but they were best suited to the circumstances of catch-up growth. He is a Research Associate of the National Bureau of Economic Research Cambridge, Massachusetts and Research Fellow of the Centre for Economic Policy Research London, England. He is a fellow of the American Academy of Arts and Sciences class of 1997. But by any objective standard, the last half century has left Europeans today enormously better off than their grandparents were fifty years ago. This directs our attention to another aspect of the inheritance shaping growth in the third quarter of the twentieth century: the Great Power conflict.
For example, these institutions worked together to mobilize savings, finance investment, and stabilize wages. Similarly, many observers have noticed that Europes relative decline began not only with the expansion of public expenditure beyond tolerable limits, which fostered the monetary acceleration, but also with growing public debt and greater reliance on the welfare state, the instrument through which politicians justified their race to power, as well as both the solution to individuals problems and the response to their reluctance to accept responsibilities. Or the case in our own times, when many western European countries Italy, for example retain significant corporatist features. This time is necessary for searching and sorting links. He is Immediate Past President of the Economic History Association 2010-11 academic year. Countries falling within the ambit of the United States or the Soviet Union came under pressure to adopt the same form of economic and social organization as the power under whose security umbrella they sheltered. Economic growth was facilitated by solidarity-centered trade unions, cohesive employers associations, and growth-minded governments—all legacies of Europes earlier history.
Over the second half of the twentieth century, the average European's buying power tripled, while working hours fell by a third. Over the second half of the twentieth century, the average European's buying power tripled, while working hours fell by a third. Eichengreen's masterful narrative never loses its focus while ranging far to integrate successfully international political contexts and informal economic conventions. Of course, the author does not offer simply a list of events and comments. Today, things could hardly be more different.
The Princeton Economic History of the Western World. Katzenstein, Cornell University A magisterial achievement. Lack of wage-rate moderation and an increase in government expenditure designed to meet workers demands led to even lower growth rates, culminating in the quasistagnation that prevails today. Advertisement Eastern Europe manifested this problem in its most extreme form. The author seems to have made his decisions by identifying the typical reader for whom he was writing the book: someone curious to know what really happened in Europe during the past sixty years, eager to have a broad representation before diving into more rigorous economic and political investigations or developing his own thoughts. May need free signup required to download or reading online book.
The 1920s and 1930s had been decades of instability and crisis, to be sure, but they were also a period of rapid technical change. Critical to Western Europe's success was the security of private property rights and reliance on the price mechanism. He reminds us that economic development calls for much more than simply the unleashing of market forces; it demands institutions capable of generating the resources, skills and relationships necessary to handle the particular economic challenges a country has to face at a particular time. That they did not go wrong now reflected the fact that Europe possessed a set of institutions singularly well suited to the task at hand. This will not be easy. Eichengreens organization is simple and effective: western Europes economic history may be divided into three economic stages and two institutional periods.