Discussing the rapid "catch-up" growth of both Western and Eastern European economies in the first decades following the end of World War II in his chronological narrative of the European economy, Eichengreen (economics and political science, U. of California at Berkeley) argues that Europe had inherited a set of institutions particularly well suited for the task--a coordinated capitalism of solidaristic trade unions, cohesive employers associations, and growth-minded governments working together to mobilize savings, finance investment, and stabilize wages at levels consistent with full employment in Western Europe and wholesale nationalization and central planning in the East. While these institutions worked well when brute-force capital formation and technology acquisition were important to growth, a shift came in which increases in efficiency and internally generated innovation became more important for economic growth. This transition, Eichengreen argues, meant that those same institutions that had once worked well for European growth became greater constrains on the economy beginning in the 1970s. Annotation ©2007 Book News, Inc., Portland, OR (booknews.com)

Eichengreen, even as he presents a lot of evidence, proves himself to be a master of exposition of the big story. And none could be bigger than the one contained in this book. History will judge it one of the most amazing achievements of the 20th century.

Many Eastern states have now joined the EU and made economic progress. Ambitions are high, but the author questions whether Europe can maintain its traditional communitarian ideals as global competition intensifies. Useful notes and bibliography.

For both Americans who want to understand Europe's successes and failures, and for Europeans who want to know where their continent was right and where it has gone wrong, Mr. Eichengreen has provided an excellent summary.

A characteristic of the best histories is not just a good narrative but a compelling thread that runs through it. Barry Eichengreen's tour de force of postwar European history is that kind of book. . . . His thesis is that Europe's much maligned corporatist institutions played a significant role in achieving the postwar economic miracle, but that these institutions are insufficiently flexible to meet the 21st century's demands. . . . While there can be no such thing as a definitive history of Europe's postwar economy, Eichengreen at least comes close to providing a definitive history of European economic performance, a subject in which he excels. This is in itself no mean achievement.

Encompassing all of Europe, this magisterial book tells the story of how, during the second half of the twentieth century, high growth based on capital formation changed to low growth based on innovation. Eichengreen's masterful narrative never loses its focus while ranging far to integrate successfully international political contexts and informal economic conventions.

In , Barry Eichengreen . . . presents not only a comprehensive account of Europe's postwar economic experience but also an important analysis of capitalist development more generally. . . . [B]y demonstrating how institutions helpful in one era can be counterproductive in another, Eichengreen has important lessons about the future to teach both policy makers and publics.

This is a superb overview of a half century of European economic development.

An excellent book. . . . I have never read a better [book] on what the European economies have done right and subsequently did wrong. . . . Eichengreen . . . believes that Europe can turn things around, without chucking the basic model, but he doesn't for a moment deny that Europe faces an economic crisis relative to the American model.

This is a splendidly delivered analysis that helps us make sense of the reversal of growth fortunes experienced by the United States and Europe since the mid-1990s. . . . is beautifully written and will be widely read.

Barry Eichengreen is George C. Pardee and Helen N. Pardee Professor of Economics and Political Science at the University of California, Berkeley. His books include "Golden Fetters: The Gold Standard and the Great Depression, 1919-1939" and "Globalizing Capital: A History of the International Monetary System" (Princeton).

LIST OF FIGURES ix
LIST OF TABLES xi
PREFACE xv
LIST OF ABBREVIATIONS xix

CHAPTER ONE: Introduction 1

CHAPTER TWO: Mainsprings of Growth 15
Probing Deeper 20
Institutional Foundations of the Golden Age 31
Institutions and History 40
The End of the Golden Age 47

CHAPTER THREE: The Postwar Situation 52
Reconstruction 54
The Transition to Sustained Growth 59
Normalization and the Political Economy of the Marshall Plan 64
German Economic and Monetary Reform 70
Obstacles to Integration 73
The 1949 Devaluations 77
The European Payments Union 79

CHAPTER FOUR: Dawn of the Golden Age 86
Understanding Growth in the 1950s 89
Germany as Pacesetter 93
Next in Line 97
The Laggards 118
Toward the Golden Age 129

CHAPTER FIVE: Eastern Europe and the Planned Economy 131
The Strategy of Central Planning 133
Problems of Central Planning 142
Partial Reforms 146
Planning Innovation 154
Regional Integration 155
The End of Reform 160

CHAPTER SIX: The Integration of Western Europe 163
Initial Steps 167
EFTA and the British Dilemma 176
Economic Effects 178
The Common Agricultural Policy 182
The Luxembourg Compromise 185
Inklings of Monetary Integration 187
The Common Market as an Established Fact 195

CHAPTER SEVEN: The Apex of the Golden Age 198
The Heyday of Extensive Growth 199
The Incorporation of the European Periphery 204
Wage Explosion and Labor Conflict 216
The End of the Golden Age 223

CHAPTER EIGHT: Mounting Payments Problems 225
Italy's Crisis 226
Britain's Problems 229
The French Crisis and the German Response 238
The Collapse of Bretton Woods 242
The European Response 246

CHAPTER NINE: Declining Growth, Rising Rigidities 252
The Productivity Slowdown 253
Innovation 257
Unemployment 263
Stabilization in Britain 277
The EMS Initiative 282
The EMS in Operation 286
The Legacy 290

CHAPTER TEN: The Collapse of Central Planning 294
The Survival of Central Planning 296
The Collapse of Communism 301
Recession and Adjustment 303
Dilemmas of Transition 308
Economic Response 310
German Reunification 318
Normalization and Integration 328

CHAPTER ELEVEN: Integration and Adjustment 335
The Single Market 336
Integration in Practice 341
From the Delors Report to the Maastricht Treaty 346
The EMS Crisis 357
The Transition to Monetary Union 366
EMU and Its Implications 370
Adjustment and Growth 377

CHAPTER TWELVE: Europe at the Turn of the Twenty-first Century 379
Employment and Growth 381
Reducing Unemployment 388
Implications for European Unemployment 393
Productivity Growth 398
Eastern European Prospects and Western European Implications 406
Economic Prospects 412

CHAPTER THIRTEEN: The Future of the European Model 414
Battle of the Systems 419
The Shadow of History 423

APPENDIX: Sources of Growth 427

REFERENCES 433
INDEX 461