The Role of Macroeconomic Policy in Overcoming Slow Economic Growth - International Comparisons and Policy Perspectives

A fundamental point of this paper is, that - given existing structures (!) - the persistent problem of high unemployment in Europe cannot be attributed to tendencies in "jobless-growth" but is mainly caused by the fact that GDP-growth has been - and is still too low. This argument is first based on the pronounced cyclical reagibility of employment and unemployment. A first glance at Figure 1 immediately reveals this cyclical reagibility of European labour-markets - which is, however combined with "hysteresis-effects", thus creating a tendency of increasing long-term unemployment. In the next section the question as to why growth-rates in the 80s and 90s were much lower than compared to the 60s and 70s will be studied. The connections between employment and economic growth will be discussed in more detail in section 3 of this paper.