Europe's nations and regions

Dalia Marin, 10 August 2018

In 1997 Germany was called "the sick man of Europe". So what is behind its exceptional recovery? Tim Phillips talks to Dalia Marin, the editor of a recent VoxEU ebook that explains what Germany did, and what other countries can learn from it.

Thierry Mayer, Vincent Vicard, Soledad Zignago, 02 August 2018

Sixty years after the Treaty of Rome came into force, doubts about the benefits of trade openness are increasing among the general public and policymakers, with Brexit and calls from many governments for a reversal of key integration agreements painting a bleak picture of what may come next. This column revisits the gains EU members have reaped from trade integration since 1957 and what would be the costs of going backwards. The results suggest that the Single Market has increased trade between EU members by 109% on average for goods, with associated welfare gains reaching 4.4% for the average European country.

Gregory Clark, Neil Cummins, 30 July 2018

Northern England is now less educated and less productive than the south. This north-south divide is often characterised by policymakers as evidence of market failure. This column uses surname distributions to show that the northern decline can instead be explained by persistent outmigration of talent from the north. People of northern origin perform as well on average as those of southern origin. Talented northerners, however, are now mainly located in the south, where they are an economic elite.

Massimo Bordignon, Nicolò Gatti, Massimiliano Onorato, 27 July 2018

While it was obvious at the time of the introduction of the euro that the euro area did not satisfy the criteria for an optimal currency area, increased economic convergence was expected to make it easier to introduce the institutional reforms necessary to converge into a fully-fledged political union. This column examines convergence among early EMU entrants in terms of public services, product and labour markets regulation, and quality of institutions. The main message is pretty clear: the viability of the EMU project seems to be more in trouble on political rather than economic grounds.

Yuriy Gorodnichenko, Debora Revoltella, Jan Svejnar, Christoph Weiss, 25 July 2018

Many barriers keep resources from flowing to the most efficient firms in the EU. This column uses firm-level data from all EU countries to explore how the dispersion of resources affects macroeconomic performance. Harmonising the business environment – and thus easing the flow of resources – across countries and industries could increase aggregate EU growth by 18%. The findings also demonstrate how firm-level characteristics can help us understand distortions in the allocation of resources across firms. 

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