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Why is there a Productivity Problem in the EU? CEPS Working Documents No. 205, 1 July 2004

Daveri, Francesco. (2004) Why is there a Productivity Problem in the EU? CEPS Working Documents No. 205, 1 July 2004. [Working Paper]

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    Abstract

    Magazines and newspapers often refer to or even take for granted the economic decline of the EU, particularly when contrasting the EU data with US data. The first part of this paper poses the question of whether IT – as often alleged – is really the only cause for the EU’s productivity slowdown. The conclusion is that it is not. The non-IT part of the economy has not only contributed to the slowdown but appears to have crucially contributed to the EU-US growth gap as well. There is thus little reason for the EU to target IT-diffusion as an intermediate goal, as implied by the Lisbon strategy. The second part of the paper, after showing that the growth slowdown comes from the reduction of non-IT capital deepening and the lack of acceleration in total factor productivity growth, argues that the slowdown of capital deepening will continue. The scarce resources available for enhancing growth should concentrate on providing incentives to R&D and innovation at large, rather than financing traditional infrastructures. This is at odds with the goals pursued by the EU within the framework of the European Growth Initiative.

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    Item Type: Working Paper
    Subjects for non-EU documents: EU policies and themes > Policies & related activities > innovation policy
    EU policies and themes > Policies & related activities > RTD policy/European Research Area
    EU policies and themes > Policies & related activities > information technology policy
    Subjects for EU documents: UNSPECIFIED
    EU Series: UNSPECIFIED
    ["eprint_fieldname_eusries" not defined]: UNSPECIFIED
    EU Annual Reports: UNSPECIFIED
    Series: Series > Centre for European Policy Studies (Brussels) > CEPS Working Documents
    Depositing User: Phil Wilkin
    Official EU Document: No
    Language: English
    Date Deposited: 14 Apr 2007
    Page Range: p. 51
    Last Modified: 15 Feb 2011 17:43
    URI: http://aei.pitt.edu/id/eprint/6638

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