The Evolution of the European Economy: Implications for Transatlantic Relations
Abstract
Ever since the creation of the Atlantic Alliance and the launching of the Marshall Plan in the years following World War II, the United States has been the dominant voice in the transatlantic community. In recent years, however, both the security and economic dimensions of U.S. leadership have begun to erode. This erosion, coupled with a more integrated and stronger European economy, has led to a realignment of the transatlantic relationship. European economic performance has converged with that of the United States in many areas. Furthermore, the increasing tendency of the European Community (EC) to act on behalf of its member countries has increased Europe's relative stature in the relationship. Since World War II, the performance of the European economy has followed a somewhat different path than that of the United States. Until about 1970 growth rates of both Gross Domestic Product (GDP) and per capita GDP in Europe generally outpaced those in the United States. Subsequently, EC and U.S. GDP growth was roughly comparable, except during the first half of the 1980s when U.S. growth was more rapid. Over the entire postwar period, European per capita GDP has converged with that of the United States, fueled in part by an increase in European productivity in terms of output per employed person and output per man hour relative to that of the United States. Job creation, however, is one area where the United States economy has far outperformed its European counterparts. During this same period, the European share of world trade has risen dramatically as a result of skyrocketing trade within the region. The prospects for growth in the next decade for the United States are uncertain. The growth prospects for Europe depend on the outcome of several interrelated developments, including German unification, economic reform in central Europe and the USSR, and the EC.92 program and the prospects for a European economic and monetary union.
Document Details
- Document Type
- Technical Report
- Publication Date
- Jan 01, 1992
- Accession Number
- ADA260639
Entities
People
- Christopher L. Cooper
- J. Steinberg
- M. Shires
Organizations
- RAND Corporation