What is a Collapse?
By Arnold Kling
A society can get stuck in an “idea trap,” where bad ideas lead to bad policy, bad policy leads to bad growth, and bad growth cements bad ideas.
As far as the definition of being “on the verge” is concerned, I think I prefer a probabilistic story. I would say that the probability that several European countries will fall sufficiently far into the idea trap that their standard of living stagnates for more than a decade is about 25 percent over the next forty years. Stagnation would be particularly bad, given that I expect technological progress to accelerate, causing economic growth to exceed 5 percent per year in much of the world as we get toward the middle of the century. In that context, zero economic growth for a decade will seem like a collapse.
See also The Economist blog