Europe’s Openness Leans Against its Productivity Headwinds
- As the world’s most open major economy, the European Union provides a compelling case of how its openness affects productivity and its broader economic backdrop. Our sequential approach to the question establishes relationships among trade, competition, openness, and productivity.
- Based on these relationships, our research quantifies the effect that the EU’s competitive backdrop and openness has on productivity.
- Although our findings show that Europe’s recent, moderate growth would have been far worse without these improvements, the region stands to reap long-term benefits that will extend beyond the global cyclical recovery.