Location: The Heritage Foundation's Lehrman Auditorium

Why are some Western countries more prosperous than others? Why, for example, does Europe suffer from higher unemployment and lower GDP growth than the United States?  According to Dr. Barry Eichengreen in his recent book, much of the answer lies in the different way in which European nations structure their economies.  The end of WWII left Europe devastated.  Among the ashes, Europeans began to construct new institutions, economic no less than political.  Continental governments developed a close relationship with their businesses, one more intertwined than in the United States.  This strategy seemed to work, and some of the founding nations of the European Union dreamed that Europe’s economy might one day overtake the United States.

After the initial boom, however, Europe’s economic infrastructure has shown its cracks.  The same mechanisms that appeared to resurrect war-torn economies are now preventing those economies from competing with America and parts of the developing world.  Europe lags far behind the United States in the modern hallmarks of competitive economies, such as start-ups, research and development, and high risk/high reward investments.  The continent’s inability to liberalize its post-war institutions is costing states revenue and Europeans jobs.  Despite consternation about poor economic growth, however, there is little political will for positive action.  How this came to be – and how it can be fixed – is the focus of Dr. Eichengreen’s discourse and lecture discussion.