By Immo H. Wernicke
This topic has been discussed during the 7 th International Conference on Business and Management in New York on July 10-11, 2015 organized by the Global Strategic Management Inc. and chaired by Professor Matthew Kuofie from the Michigan University. The contribution of the author as key note speaker has been published in the Journal of Economic Development, Management, IT, Finance and Marketing, Volume 7 Number 2 – September 2015. The abstract of the paper with the title “Achieving Sustainable Economic Growth from the European Point of View” is being made available here:
Abstract
Gigantic administrative system in Europe – poor information
“This paper first discusses the definition for measuring economic growth by Gross Domestic Product (GDP) as a reference indicator in national legislation and the European treaties. For GDP calculation the National Accounts Approach follows the international standards. The European Union has established a gigantic administrative, legal and institutional framework to operate the European Statistics System and to provide an adequate picture of the economy by National Accounts. “
Neglection of the impact of excessive money supply and “hidden money”
“This framework did neither forecast nor indicate any crisis during 2008-2014. Schumpeter puts the conventional GDP approach to planning economies of the Soviet type. Popper and Friedman criticize the tautological frame and the mismatch of production and governmental and financial services. Morgenstern points on the poor accuracy of official economic data. Finally, the approach neglects the impact of excessive money supply and credit financing on the “real economy”, of the “informal economy” and the “off-shore-hidden money” phenomenon.”
The paper will discuss the national wealth concept and Piketty’s disparity of property and wealth distribution. Doubts are to be expressed on the adequacy of the GDP-approach for macro-economic politics.
Growth by Industrie 4.0, Renewable Energy and Bio Economy
New strategies of the EU and the German Government to overcome future crisis and to support new opportunities for growth on microeconomic level seem to be more successful. Millions of companies of the “real economy” in Europe can make use of Rifkin’s concept of
the digital revolution and the official Industrie 4.0 concept to achieve growth by IT in industrial manufacturing and engineering and in logistics sectors.
Growth might as well achieved by renewable energies, “bioeconomy” in agriculture and TTIP with the USA in trade.
Threats on Growth in Europe by Cyber and Civil Wars and the Refugee Problem
Threats on growth are to be taken into account in Europe by Cyber war, the refugee and civil wars problem, continuous debt financing, poor public and private investment in public infrastructure and the Ukraine crisis and finally by the “jungle of regulations”.
Photos: Wernicke