Structural change in times of increasing openness: Assessing path dependency in European economic integration

Claudius Gräbner-Radkowitsch, Philipp Heimberger, Jakob Kapeller and Bernhard Schütz

VfS Annual Conference 2019 (Leipzig): 30 Years after the Fall of the Berlin Wall - Democracy and Market Economy from Verein für Socialpolitik / German Economic Association

Abstract: This paper analyzes the dynamics of structural polarization and macroeconomic divergence in the context of European integration, where the latter is understood primarily as an increase in economic and financial openness. In the process of estimating the dynamic effects of such an openness shock on 26 EU countries, we develop a taxonomy of European economies that consists of core, periphery and catching-up countries, as well as financial hubs. We show that these four country groups have responded in a distinct way to the openness shock imposed by European integration and argue that the latter should be seen as an evolutionary process that has given rise to different path-dependent developmental trajectories. These trajectories relate to the sectoral development of European economies and the evolution of their technological capabilities. We propose a set of interrelated policy measures to counteract structural polarization and to promote macroeconomic convergence in Europe.

JEL-codes: E14 E6 F15 F4 L52 (search for similar items in EconPapers)
Date: 2019
New Economics Papers: this item is included in nep-hme, nep-mac and nep-opm
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Citations: View citations in EconPapers (15)

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Related works:
Journal Article: Structural change in times of increasing openness: assessing path dependency in European economic integration (2020)
Working Paper: Structural change in times of increasing openness: assessing path dependency in European economic integration (2018)
Working Paper: Structural change in times of increasing openness: assessing path dependency in European economic integration (2018)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:vfsc19:203487

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