Perspectives on the Performance of the Continental Economies

Economists disagree on what ails the economies of continental western Europe, whichare widely perceived to be underperforming in terms of productivity and other metrics. Is it somedeficiency in their economic system--in economic institutions or cultural attitudes? Is it someeffect of their welfare systems of social insurance and assistance? Or are these systems healthyenough but weighed down by adverse market conditions? In this volume, leading economists test thevarious explanations for Europe's economic underperformance against real-world data. The chapters,written from widely varying perspectives, demonstrate the shortcomings and strengths of some methodsof economics as much as they do the shortcomings and strengths of some economies of westerncontinental Europe. Some contributors address only income per head or per worker; others look atefficiency and distortions of national choices such as that between labor and leisure; still otherslook at job satisfaction, fulfillment, and rates of indigenous innovation. Many offer policyrecommendations, which range from developing institutions that promote entrepreneurship to usingearly education to increase human capital.

Edmund S. Phelps is McVickar Professor of Political Economy at Columbia University and founder of Columbia's Center on Capitalism and Society. He was the 2006 Nobel Laureate in Economics.