Scholars Being Justified in Using the Term Golden Age to Describe the Economic History of Western Europe During 1950-1973

1456 WordsJul 12, 20186 Pages
Scholars Being Justified in Using the Term Golden Age to Describe the Economic History of Western Europe During 1950-1973 ‘Nothing in the history of Western Europe resembles its experience between 1945 and 1968.’ Milward, European rescue, pg. 21 In the quarter of a century that followed the Second World War, the achievements of the European economy were so impressive that the period was often referred to as the ‘Golden Age’. Since 1913 Europe had experienced two world wars plus the great depression and trade wars of the 1930’s, the economy had been stunted and growth was well below trend. In the early post-war years between 1945 and 1947 recovery was frustrated by shortages of food, labour, raw…show more content…
The rising level of employment and productivty, by generating income and demand, was constantly renewing the need for more capacity and higher investment, and so in turn maintaining the pressure on resources. But was this process one that could go on indefinitely? Was it not to be expected that economic growth would slow down once needs of post war reconstruction where over? Many economists undoubtedly did expect growth to slow down up until the middle of the 1960s, but changed their mind when rapid growth continued or even accelerated. The end of the ‘Golden Age’ never the less came suddenly in 1974-1975 after the first oil shock. In this sense the breaking point was brought about in 1973, not just by the quadrupling of the price in oil but also by the world economic boom which preceded it and drove prices up in all industrial countries across the world. The question economists wanted to know was no more, how long? But rather, why? Ever since it became clear the forecasting of the post war economy, based on previous trends, did not reflect the reality presented by the ‘Golden Age’, economists started their search for reasons why? Work by such writers as Maddison gave an explanation of the ‘Golden Age’ through an approach known as “growth accounting”. Observing a huge increase in the ratio of investment to GDP and incorporating technical progress,

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