Growth and stagnation in the European economy

Abstract At the risk of oversimplifying them, the major conclusions of this important study by Professor Svennilson may be stated as follows: 1. From 1913 up to the Second World War total output and output per capita increased only slowly in Europe. Growth, taken over the whole period, was slow relative both to the development of the United States and to the European experience of earlier decades. Presumably the opportunity for faster growth existed in 'inter-war' Europe, but was not utilized.2. During these years, the economies of the European countries operated in a peculiarly difficult environment. Three principal sources of trouble were the following: 1. New political obstacles to trade and to the movement of labor and capital within Europe. Since population was growing fastest where capital was scarcest (i.e. in Eastern Europe), these obstacles—economically speaking—were especially unwelcome.2. Changes in production technology which made the location, capacity, and equipment of some heavily capitalized industries increasingly obsolete.3. Disruption of the pattern of demand for European exports arising from the growing industrialization of importing countries and from growing competition in traditional markets.