The Economic History Of Western Europe During The Period Between 1950 To 1973 Essay Example

The Economic History Of Western Europe During The Period Between 1950 To 1973 Essay The aim of this essay is to analyze whether the term Golden Age referring to the European growth during the years from 1950 to 1973 was justified as a term to describe Western Europes economic history. In order to come to a complete understanding on why the years between 1950 and 1973 were characterized as being the Golden Age and to define whether the term was justified, it will be necessary to first examine the history of Western Europe at the time as well as the economical factors that ruled and took place. During the years 1950 and 1973, there was a significant rapid change and development in Europes economical growth. This success was a result of many factors and contributed to the welfare and wider benefit. During the Golden Age everyone experienced a rapid economic growth, modest inflation and low unemployment. The growth rate for the European economy was more than twice as high in the 1950 -1973 period than in the previous 80 years. The macro-economic status was in its best throughout this period than it has ever been. This growth was an outcome of many social factors some of which are: 1. The period between 1950 and 1973 was a period of post-war reconstruction, a period which promised an opportunity for rapid growth if guided by the correct policy. This was an advantage as before 1950, since 1913 the European economical factors had experienced two world wars, which meant that the existing growth had been very low at the time. This is also the reason why the countries which were more devastated by the war, such as Italy, Germany Austria and Japan were able to have the best growth pick-up and the countries that were less devastated such as Australia, Canada, Switzerland and the United States were faced with a reduced pick-up growth. We will write a custom essay sample on The Economic History Of Western Europe During The Period Between 1950 To 1973 specifically for you for only $16.38 $13.9/page Order now We will write a custom essay sample on The Economic History Of Western Europe During The Period Between 1950 To 1973 specifically for you FOR ONLY $16.38 $13.9/page Hire Writer We will write a custom essay sample on The Economic History Of Western Europe During The Period Between 1950 To 1973 specifically for you FOR ONLY $16.38 $13.9/page Hire Writer 2. AS Asian economies were rapidly growing, pressures coming to the surface as a result of the competition were identified. A large percentage up to 93 per cent, of all manufactured exports was gained by the developed countries in 1965. However the de-industrialization of Europe was beginning. 3. As pointed out by N.F.R Craft another aspect was that the United States based on the advantage of using more advanced technological equipment, was able to have a larger scale of productivity than Europe did. By 1950 American manufacturing was 2.5 times the British level, 2.75 times the West German level and 3.1 the French level (Schulze 43). 4. During the period 1950 to 1970, materials such as energy were low priced. After 1973 up until 1980 there was a very high raise in prices. The price of oil was raised from $2.1 to $35.5 a barrel. From the following table we can observe the income elasticities and growth rates for the period 1955-1965. As Houthakker and Maggee,(1969) conclude, a high income elasticity of demand for exports and a low elasticity for imports is the main income pattern for fast- growing countries. A stable real exchange rate can be accomplished through this phenomenon. However as Krugman (1989) suggested, we can not imply that the elasticity income alone develops fast growth. The growth of Europe can be seen as a result of the expansion of its share of world markets by expanding the range of goods, rather than reducing prices. The period between 1950 and 1973 is conventionally known as the Golden Age of European economic growth (Crafts, 1995a). with no doubt we can say that technology transfer was an important influence leading to the integration of European markets, price changes, greater codification of knowledge, and the proliferation of multinational enterprise (Nelson and Wright, 1992). However these components were not the only influence. The transfer of workers from agriculture as well as post-war reconstruction was important to the catch-up growth. Even though there was a bounce back from the disruption of the world wars and interwar depression and protectionism, in general, European countries did far better than merely get back on a pre-existing growth trend (Mills and Crafts, 2000). Referring to the cheap technology as an explanation for the rapid economical growth for the period 1950 to 1973 leading to the golden Age, Boltho (1982) argues: If cheap technology and abundant labor and raw materials were not novel features of industrial Europe, something else must still explain why in the 1950s and 1960s they led to supergrowth Such an explanation would seem to have come from the demand side. . Boltho(1982) As (Abramovitz, 1986) described, in order for the catch-up in the early postwar Europe to take place and be successful it was necessary to have a social capability meaning that structures that would encourage investment and innovation had to be present. However in many countries social contracts that facilitated wage moderation in return for high investment in a corporatist setting accompanied by trade liberalization were developed (Eichengreen, 1996). The catch-up growth outcomes during the Golden Age, was not the same for all countries. This is totally understandable if one considers the importance of institutions in growth. The period of 1950-1973 is justified when characterized with the term Golden Age as the fast economic growth in Western European countries produced an improvement in labor as well as the raise of the welfare for the state and the social economy. Higher employment rates and employment opportunities were produced, benefiting workers and their families. The increase demand in labor is accomplished by increasing the demand for products as well as the prices of products which are produced and exported. As mentioned previously in this essay, the Golden Age also meant the increase of the GDP for the sample of 141 countries the increase was from 1.73 in 1950 to 2.50 and to 3.09 in the 1990s . Throughout this essay many opinions, statements, notions and theories were stated and analyzed, in order to come to a conclusion on whether scholars were justified in using the term Golden Age to refer and describe the economic history of Western Europe during the period between 1950-1973. in order to come to a conclusion some facts such as some major points and aspects that lead to the development of the Golden Age as well as the advantages of that period were analyzed. The period of 1950-1973 was indeed a Golden Age for the individuals as well as the wider society and the state. There is no dispute that this period was successful in terms of macro-economic performance as the real growth rate for the world economy was more than twice as high than was before or even since. Throughout the Golden Age unemployment remained low, leading every segment to a wider range of choices, opportunities and in general a better life. Apart from individuals the state also benefited during that period as the growth in scale of the economy led to rising trade.