The effects of the global financial crisis on European regions and cities

Abstract

Growth before and especially after the crisis differed from large-city-led growth pattern. The crisis has led to big contractions especially in urban regions and in remote rural regions, while intermediate and rural regions close to a city displayed more resilience. In some countries, the capital metro region had much higher economic growth prior to the crisis, but this pattern was inverted by the crisis. Capital cities are now central to the problems faced by national economies in Europe, and appear to have exacerbated the adverse effects of the crisis. This implies that a development strategy primarily focused on the capital city can lead to more volatile and potentially lower growth, than a more a balanced development strategy. The article uses data from the OECD regional database to investigate the performance of rural, intermediate and urban regions and Eurostat data to investigate metro regions.