Question

1. What happened to urban landscapes in Europe in the decades after World War II?

2. What are the spatial patterns of economic development in the European Union? That is, which areas are more exonomically developed, and which areas are less economically developed?

Answer 1

1) After the word war II ended, Europe marked the achievement of a high and sustained level of economic growth and high levels of productivity growth together with low unemployment. There were emergence of new international institutions such as the International Monetary Fund and the World Bank. In Western Europe, it took only three years for production to return to pre-war levels and four years in the case of exports, compared with six years for both production and exports after the First World War. However, food consumption per capita in this region was restored to pre-war levels only in 1950. Western Europe saw some of its markets for manufactures (e.g., textiles) shrink after the war, owing to import substitution. As a result of the “dollar shortage” which resulted from the war, European countries continued to use import and foreign exchange controls extensively. Further, an increase in production of foodstuffs in Western Europe allowed for a reduction of European imports from the United States, which in turn allowed an improvement in the current account balance. The fact that reserves ultimately recovered in late 1949 helped reduce speculative capital flight. This reflected the importance of improved production capacities and an increase in food supplies rather than the importance of relative prices (exchange rates) for the restoration of payments balances. The Marshall Plan encouraged war-battered countries in Western Europe to shift away from bilateralism in trade towards a multilateral balancing of payments. This was the starting point for the rapid growth of trade which has been witnessed by the international community over the last 70 years.

2) The spatial patterns of economic development in the Europe Union are regional incomes, production, and distribution. Over recent decades the EU has also proven to be an enviably efficient wealth creation machine – and not just for those at the top of the population, but for the entire society. Among Europe’s strengths, the EU remains one of the largest economies in the world with a GDP per head of US$37,000 for its over half billion citizens and consumers. It is the world’s largest trader of manufactured goods and services, whose large internal market accommodates 65% of its overall trade, given low labor costs and a well-educated common market workforce. It is also first in both inbound and outbound international investments.