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To live up to its growth potential and secure its inclusive social model, the euro area must make better use of its available labor. In the aftermath of the crisis, boosting growth is essential to prevent unemployment from becoming a long-term problem and to facilitate the return to fiscal sustainability. Labor utilization in the euro area has been lagging considerably behind its best performing peers. While fewer hours worked may, to some extent, reflect a social choice, higher unemployment rates and lower participation rates, on the other hand, cannot easily be attributed to individual preferences. Here, policies and institutions matter more. And there is little excuse for relatively low labor productivity, a particular bane in southern Europe and an increasing challenge everywhere. Kick-starting growth requires a comprehensive approach to labor and service market reforms. Different circumstances call for different approaches across countries. Countries in southern Europe need to focus on regaining competitiveness, while some in the core should promote higher labor force participation or more open service sector markets. Improving access to the labor market should be high on the priority list everywhere—including through some harmonization of key features of the labor market, which will help deal with intra-euro area imbalances. Differences in labor taxation, unemployment benefit systems, and employment protection will need to be reduced. Improving regulation and reforming taxes and social benefits will be essential to make inroads. For the longer term, focus should be on innovation, education, and on continuing financial sector reforms.

Labor --- Macroeconomics --- Industries: Service --- Labor Economics Policies --- Demand and Supply of Labor: General --- Institutions and the Macroeconomy --- Industry Studies: Services: General --- Labour --- income economics --- Labor markets --- Labor market reforms --- Structural reforms --- Services sector --- Labor policy --- Economic sectors --- Macrostructural analysis --- Labor market --- Manpower policy --- Service industries --- United States --- Income economics

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This paper analyzes the link between economic growth and structural reforms. The paper highlights that as the recovery from the financial crisis firms up, many country authorities will turn their focus from short-term stabilization policies to more structural policies to spur long-term potential growth. The paper discusses that the global financial crisis has affected growth in countries of all income levels and has led to substantial output losses that in many cases could be permanent. The paper also presents a discussion on monetary policy and asset prices.

Exports and Imports --- Finance: General --- Financial Risk Management --- Macroeconomics --- Banks and Banking --- Price Level --- Inflation --- Deflation --- Financial Crises --- Current Account Adjustment --- Short-term Capital Movements --- Education: General --- General Financial Markets: General (includes Measurement and Data) --- Institutions and the Macroeconomy --- International economics --- Finance --- Economic & financial crises & disasters --- Education --- Monetary economics --- Asset prices --- Structural reforms --- Financial crises --- Capital account --- Prices --- Macrostructural analysis --- Balance of payments --- Income --- National accounts --- Thailand