European growth models before and after the great recession

Abstract

This chapter summarizes and elaborates on the “growth models perspective” proposed by Baccaro and Pontusson (2016). In addition, the chapter updates the previous analysis of post-Fordist growth trajectories in Germany, Italy, Sweden and the UK. With growth models operationalized in terms of the contributions of different components of aggregate demands to GDP growth, the analysis shows that the growth models that these countries adopted in the period prior to the crisis of 2008-10 have by and large persisted into the 2010s. Exports remain the driver of German economy while household consumption remains the key to British economic growth and Italy continues to be mired by economic stagnation. Sweden is the one case for which one observes a shift in growth dynamics in the wake of the crisis, with domestic consumption playing a more important role relative to net exports.