Fostering Inclusive Growth in Europe post-Covid

The Covid crisis has shed light on the weaknesses of capitalism. In this paper, authors Philippe Aghion and Aymann Mhammedi argue in favour of a capitalist system that combines the innovative side of the US model and the inclusive and protective side of the “Danish” model.

The authors depart from the view that more innovation comes at the expense of inclusiveness and protection, and vice versa. Instead, they emphasise three key policies that can stimulate innovation-led growth while making it more protective and inclusive:

  • competition policy,
  • education policy and
  • “flexsecurity” in the design of labour-market policy.

Furthermore, the authors show that growth-enhancing investments can be made without public debt running out of control.

About the authors

Philippe Aghion is a Professor at the College de France and at the London School of Economics, and a fellow of the Econometric Society and of the American Academy of Arts and Sciences. His research focuses on the economics of growth. With Peter Howitt, he pioneered the so-called Schumpeterian Growth paradigm which was subsequently used to analyze the design of growth policies and the role of the state in the growth process. In 2009 he received the John Von Neumann Award, and in March 2020 he shared the BBVA “Frontier of Knowledge Award” with Peter Howitt for “developing an economic growth theory based on the innovation that emerges from the process of creative destruction”.

Aymann Mhammedi is an econ student at ENS Paris-Saclay (Paris-Saclay University) as well as a research assistant at Collège de France where he usually works with Pr. Aghion.

About the editor

Anna Willman is a Climate Policy Expert at Fores and holds a Master’s degree in Environmental Economics and Climate Change from London School of Economics.

About ELF

The European Liberal Forum (ELF) is the official political foundation of the European Liberal Party, the ALDE Party. Together with 46 member organisations, we work all over Europe to bring new ideas into the political debate, to provide a platform for discussion, and to empower citizens to make their voices heard. ELF was founded in 2007 to strengthen the liberal and democrat movement in Europe. Our work is guided by liberal ideals and a belief in the principle of freedom. We stand for a future-oriented Europe that offers opportunities for every citizen. ELF is engaged on all political levels, from the local to the European. We bring together a diverse network of national foundations, think tanks and other experts. At the same time, we are also close to, but independent from, the ALDE Party and other Liberal actors in Europe. In this role, our forum serves as a space for an open and informed exchange of views between a wide range of different actors.

About Tankesmedjan Fores

Fores – Forum for reforms, entrepreneurship and sustainability – is the green and liberal think tank based in Sweden. With one foot in academia and the other in the public debate, Fores works every day towards solutions and policies that strengthen the liberal democracy. Through our three work groups we seek scientifically based, forward-looking policies on Growth, Security and Trust.