Let us sit in 1945 and look at western Europe. What do we see?
  • A truly genocidal subcontinent--devastated over the past four centuries by wars of religion, ideology, and nationalism.
  • A not-that-rich subcontinent--levels of output per worker averaging perhaps half those of what appears possible given technology elsewhere, in America, Canada, and Australia.
  • A Eurosclerotic subcontinent--lobbies and entrenched interests playing negative-sum games, whether unions, aristocracies, small craft producers, or mini-nations.
  • A politically-disordered subcontinent--Nazis, fascists, communists, shaky democracies, coups, street riots, large-scale political street violence.

You would have had to have been a brave person to predict the post-WWII western European renaissance...

Conversely, you might have been "optimistic" about the Soviet Union: cruel, barbarous, murderous, but also--effective in accomplishing its tasks.Why the reversals of fortune of the 30 glorious years?

Take a look at what Barry Eichengreen and Brad DeLong wrote back in 1991 .


Writing Assignment:

  • A growing literature develops explanations for 'Europe's golden age' (the European economy's fast growth in the third quarter of the 20th century). Is this effort misguided? In other words, do we really need fancy explanations for a straightforward phenomenon that is easily explained in terms of convergence and delayed structural change?

Thoughts, Notes, and Questions:

Additional and Optional Readings:

  • Crafts, N.F.R. and G. Toniolo (eds.) [1996], Economic Growth in Europe Since 1945 (Cambridge U.P.), Chapters 1, 2. (*)
  • DeLong, J.B. and B. Eichengreen [1993], "The Marshall Plan: History's Most Successful Structural Adjustment Program," in R. Dornbusch, W. Nölling and R. Layard (eds.), Postwar Economic Reconstruction and Lessons For the East Today (MIT Press). (#)
  • Eichengreen, B. and M. Uzan [1992], "The Marshall Plan: Economic Effects and Implications for Eastern Europe and the Former USSR," Economic Policy 14: 14-75.
  • Irwin, D.A. [1995], "The GATT's Contribution to Economic recovery in Post-war Western Europe," in B. Eichengreen (ed.), Europe's Post-war Recovery (Cambridge University Press). (#)