TY - UNPB
T1 - Growth models in advanced countries before and after the 2008 crisis: competitiveness, financial cycles and austerity
AU - Kohler, Karsten
AU - Stockhammer, Engelbert
PY - 2020/3
Y1 - 2020/3
N2 - The paper contributes to the recent growth models debate through a cross-country analysis of macroeconomic growth drivers after the 2008 crisis. It examines the role of competitiveness, finance, and fiscal policy as sources of foreign, private and public demand. While all countries experienced a slowdown in economic growth and a stronger export-orientation, macroeconomic performance has been highly uneven. Growth drivers have partly changed, calling for reconsideration of some key topics in the growth models debate. We argue that (i) non-price competitiveness has gained importance compared to price competitiveness, (ii) debt-driven growth models are cyclical and financial booms come with busts and debt overhang, (iii) post-crisis growth models are strongly shaped by fiscal policy. Northern Europe reinforced its export-orientation despite some wage and property price inflation, but with limited effects on growth. Eastern Europe benefitted from an improvement in export sophistication prior to the crisis and outperforms in terms of growth. Southern Europe underwent a debt-driven depression, exacerbated by contractionary austerity policies. While also affected by the downturn of a financial cycle, the English-speaking countries sustained demand through slower fiscal consolidation.
AB - The paper contributes to the recent growth models debate through a cross-country analysis of macroeconomic growth drivers after the 2008 crisis. It examines the role of competitiveness, finance, and fiscal policy as sources of foreign, private and public demand. While all countries experienced a slowdown in economic growth and a stronger export-orientation, macroeconomic performance has been highly uneven. Growth drivers have partly changed, calling for reconsideration of some key topics in the growth models debate. We argue that (i) non-price competitiveness has gained importance compared to price competitiveness, (ii) debt-driven growth models are cyclical and financial booms come with busts and debt overhang, (iii) post-crisis growth models are strongly shaped by fiscal policy. Northern Europe reinforced its export-orientation despite some wage and property price inflation, but with limited effects on growth. Eastern Europe benefitted from an improvement in export sophistication prior to the crisis and outperforms in terms of growth. Southern Europe underwent a debt-driven depression, exacerbated by contractionary austerity policies. While also affected by the downturn of a financial cycle, the English-speaking countries sustained demand through slower fiscal consolidation.
KW - growth models
KW - austerity
KW - financial cycles
KW - comparative political economy
KW - post-Keynesian macroeconomics
M3 - Working paper
VL - 2008
T3 - PKES Working Paper
BT - Growth models in advanced countries before and after the 2008 crisis: competitiveness, financial cycles and austerity
PB - Post-Keynesian Economics Society
ER -