During the second half of the 1990s, the French economy grew strongly, outperforming the average for both the OECD and the euro area. Between 1997 and 2000 GDP grew faster than potential, reversing the output gap that had emerged in the first half of the decade. The recovery was sustained by strong domestic demand, itself supported by tax cuts, an investment boom connected to the stock market bubble, strong employment growth and, towards the end of the period, a relaxation of fiscal policy…