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The European Union began with efforts in the Cold War era to foster economic integration among a few Western European countries. Today’s EU constitutes an upper tier of government that affects almost every level of policymaking in each of its twenty-seven member states. The recent financial and economic crises have tested this still-evolving institutional framework, and this book surveys key economic challenges faced by the EU. European economists examine such topics as the stability of the financial markets and possible policy options to reduce future vulnerability to crises, including Glass–Steagull-style narrow banking; the effect of emerging economies such as China and India on Europe’s economic position; the protection of national interests in industrial policy; reforming and preserving the welfare state in the face of unemployment, population aging, and worker mobility within the EU; and improving the EU’s institutional framework by reassigning responsibilities among supranational, national, and local governments. Among the conclusions that emerge from these analyses are the necessity for banking regulation as well as budgetary discipline; the need to consider global as well as European integration; and the idea that an environment which fosters internal competition will increase Europe’s competitiveness internationally.

Given the powerfully negative and ongoing impact of the Great Recession on western economies, the question of whether historically wealthy nations—the United States, Western European countries, Japan—can stay wealthy has become an overriding concern for virtually every interested observer. Can their middle classes remain comfortable as more and more good and technically jobs disappear to other parts of the world? Can they support themselves as they devote more and more economic resources to an aging population base? This book assesses the prospects for growth and prosperity among advanced industrial nations. Throughout, the chapters examine the core transformation in the economies of the advanced countries, the character of the challenge from the emerging economies, and the varied policy responses of the advanced countries. And, via a series of case studies, the chapters consider the central challenges these countries face internally and the nature of their responses. In particular, they ask what governments might do to achieve the goal of generating and retaining highly productive economic activity, which they collectively regard as necessary for sustained growth. In total, the book directly challenges a number of core policy and academic assumptions about the dynamics of contemporary advanced economies by looking at the problem from three different angles: firstly, a macro perspective, which considers the forces changing the policy and political economy landscape after the crisis; secondly, a sectoral perspective, which explains how these forces unleashed major shifts within critical domains and industries; and thirdly, a policy perspective that concentrates on the responses to the Great Recession of both the already rich nations and the new, game transforming, competitors such as China and India.