ABSTRACT
After accelerating in the late 1980s, economic growth in the European Community (EC) is ebbing and with it the prospects for realizing the large economic gain that could result from a successful implementation of the 1992 market unification (EC-92) efforts. Slow growth is a problem that has plagued the EC for most of the last two decades. In the 1980s real output advanced at an annual average pace of 4.2 percent in Japan, 3.0 percent in the United States, but only 2.5 percent in the EC. That the EC was growing below potential is evidenced by an unemployment rate that hovered above 10 percent for most of the last decade, well above unemployment rates in the United States and Japan (see table 1).
