This paper assesses the role of some structural factors in determining the current anemic growth of the advanced economies, especially focusing on Southern Europe. It discusses what macroeconomic policies can do for reviving growth and illustrates some hypotheses: policy makers’ attempts to push GDP growth above its sustainable long-term rate through expansionary policies, excessive leverage and rising private and public debt generate instability and imbalances; economic fundamentals and easy credit push up the price of residential and and urban rents, thus crowding out investment in productive assets and depressing long-run growth; supporting asset prices, central banks may end up exacerbating the causes making growth anemic; Summers’ secular stagnation and its policy implications do not appear very plausible; the persistency of wide competitiveness imbalances among different areas determines an unequal spatial distribution of high value-added activities, which collides with the worldwide tendency towards the equalization of workers’education levels and aspirations.
The design failures of the Eurozone have been recognized quite late and have led the Eurozone policymakers to apply wrong macro-economic policies since the eruption of the sovereign debt crisis. This has led to a dismal macroeconomic performance of the Eurozone countries as compared to the EU-countries that decided not to be part of the monetary union. We provide empirical evidence that suggests that the biggest shocks in the Eurozone were the result of business cycle movements. These were relatively well synchronised, except for their amplitude. We argue that efforts to stabilise the business cycles should be strengthened relative to the efforts that have been made to impose structural reforms, and consider the implications for the governance of the Eurozone.
The Economic and Environmental Footprint of the EU Economy:
Global Effects of a Transition to Services
We evaluate the implications of structural change towards services in the EU in terms of environmental pressures. vis a` vis the changes in the distribution of employment and value added. To carry out this integrated assessment we use Environmentally Extended Multi Regional Input Output modelling applied to data from the World Input Output Database (WIOD). The results suggest that, when looking at direct emissions (‘‘production perspective’’), the service sectors is characterized by a lower emission intensity than the industrial sectors, but this gap is much smaller when considering also indirect emissions in a ‘‘vertically integrated’’ approach (‘‘consumption perspective’’). Moreover, changes in the production structure economy in absence of relevant changes in the composition of the final demand induce an increased reliance on environmental pressures, employment, and value added generated abroad. The EU is transferring worldwide more emissions that value added and employment.