Estimates of the steady state growth rates for some European countries

This paper estimates the steady state growth rates for the main European countries with an extended version of the Solow (1956) growth model. Total factor productivity is assumed a function of human capital, trade openness and investment ratio. We show that these factors, with some differences, have played an important role to improve the long run growth rates of Italy, Spain, France, UK, and Ireland. A few policies to improve the long-run growth rates for these countries are suggested.

► Solow model is extended to estimate SSGRs for Italy, France, Spain, UK, Ireland. ► The long-run factors are: trade openness; human capital index; investment ratio. ► These factors, with some differences, explain SSGR for Italy, UK, Spain and France. ► Policies to improve the SSGRs for these countries are suggested.