Presentation on theme: "Europe: the uneven recovery* Leszek Balcerowicz Warsaw School of Economics Visiting fellow at The Hoover Institution Hoover Presentation, October 14, 20011."— Presentation transcript:
Europe: the uneven recovery* Leszek Balcerowicz Warsaw School of Economics Visiting fellow at The Hoover Institution Hoover Presentation, October 14, 20011 * in preparing this presentation I was assisted by Aleksander Łaszek
Plan of the Presentation 1.Convergence-divergence in Europe, 1994-2007 2.The boom years, 2003-2007 3.The slowdown (recession), 2008-2009 4.The recovery, 2010-2011 5.Some final observations Two groups of countries considered: Developed Europe (DE) Emerging Europe (EE)
1. Convergence - divergence in Europe, 1994-2007
4 Figure 1. GDP growth in Europe: 1994-2007, 2008-2009, 2010-2011
1.Large variation in both DE and EE regarding all key aspects of the economic performance: Europe defies easy generalizations! 2.Most countries (both DE and EE) which experienced growth problems during 2008- 2011 registered huge fiscal and/or private sector’s credit booms, as well as large increases in ULC in manufacturing, during 2000-2007
3. The recession 2008-2009 was accompanied by the increases in fiscal deficits. However, the size of these increase was not strictly related to the magnitude of the recession. 4. The unemployment in DE in 2008-2011, displayed very different dynamics, which was not strictly related to that of GDP 5. Despite recession there was no sign of deflation and recovery has been accompanied by the accerelation of inflation in DE (not so much in EE)
6. BLLE have on average adjusted much better than PIIGS. Within PIIGS Ireland and Spain have performed so far much better than Greece and Portugal. 7. The example of BLLE and Ireland shows that countries can adjust via internal devaluation even after huge shocks.