Business Intelligence

Euro Area Investment: The Generation Of GDP Growth And The Marginal Product Of Capital

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Executive Summary

Reviewing economic performance over the past three decades, it is apparent that GDP growth in the US has been faring better than that in the Euro Area. This paper aims to identify periods where growth rates have diverged between the two economic areas with particular focus on the role of investment as a means of accumulating productive capital stock. The relative importance of capital in GDP growth is assessed for the US, Euro Area aggregate and individual Member States. Investment growth rates for the Euro Area are reviewed on a disaggregated basis, noting the relative contributions of each country to the total.

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