IDEAS home Printed from https://ideas.repec.org/p/imk/fmmpap/39-2018.html
   My bibliography  Save this paper

Structual change in times of increasing openness

Author

Listed:
  • Claudius Gräbner
  • Philipp Heimberger
  • Jakob Kapeller
  • Bernhard Schütz

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.

Suggested Citation

  • Claudius Gräbner & Philipp Heimberger & Jakob Kapeller & Bernhard Schütz, 2018. "Structual change in times of increasing openness," FMM Working Paper 39-2018, IMK at the Hans Boeckler Foundation, Macroeconomic Policy Institute.
  • Handle: RePEc:imk:fmmpap:39-2018
    as

    Download full text from publisher

    File URL: http://www.boeckler.de/pdf/p_fmm_imk_wp_39_2018.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Claudius Gräbner & Philipp Heimberger & Jakob Kapeller & Bernhard Schütz, 2017. "Is Europe disintegrating? Macroeconomic divergence, structural polarization, trade and fragility," Economics working papers 2017-15, Department of Economics, Johannes Kepler University Linz, Austria.
    2. Òscar Jordà & Alan M. Taylor, 2016. "The Time for Austerity: Estimating the Average Treatment Effect of Fiscal Policy," Economic Journal, Royal Economic Society, vol. 126(590), pages 219-255, February.
    3. Òscar Jordà, 2005. "Estimation and Inference of Impulse Responses by Local Projections," American Economic Review, American Economic Association, vol. 95(1), pages 161-182, March.
    4. Laurence M. Ball & Davide Furceri & Mr. Daniel Leigh & Mr. Prakash Loungani, 2013. "The Distributional Effects of Fiscal Consolidation," IMF Working Papers 2013/151, International Monetary Fund.
    5. Cesar A. Hidalgo & Ricardo Hausmann, 2009. "The Building Blocks of Economic Complexity," Papers 0909.3890, arXiv.org.
    6. Gregory W. Fuller, 2018. "Exporting Assets: EMU and the Financial Drivers of European Macroeconomic Imbalances," New Political Economy, Taylor & Francis Journals, vol. 23(2), pages 174-191, March.
    7. Alberto Bagnai & Christian Alexander Mongeau Ospina, 2018. "Monetary integration vs. real disintegration: single currency and productivity divergence in the euro area," Journal of Economic Policy Reform, Taylor & Francis Journals, vol. 21(4), pages 353-367, October.
    8. Philipp Heimberger & Jakob Kapeller, 2017. "The performativity of potential output: pro-cyclicality and path dependency in coordinating European fiscal policies," Review of International Political Economy, Taylor & Francis Journals, vol. 24(5), pages 904-928, September.
    9. Galina Hale & Maurice Obstfeld, 2016. "The Euro And The Geography Of International Debt Flows," Journal of the European Economic Association, European Economic Association, vol. 14(1), pages 115-144, February.
    10. Mattias Vermeiren, 2017. "One-size-fits-some! Capitalist diversity, sectoral interests and monetary policy in the euro area," Review of International Political Economy, Taylor & Francis Journals, vol. 24(6), pages 929-957, November.
    11. Jan Behringer & Till van Treeck, 2017. "Varieties of capitalism and growth regimes," FMM Working Paper 09-2017, IMK at the Hans Boeckler Foundation, Macroeconomic Policy Institute.
    12. Lars Bräutigam & Karl Michael Beyer, 2016. "Das europäische Schattenbankensystem," Working Paper Reihe der AK Wien - Materialien zu Wirtschaft und Gesellschaft 154, Kammer für Arbeiter und Angestellte für Wien, Abteilung Wirtschaftswissenschaft und Statistik.
    13. Eckhard Hein & Torsten Niechoj & Heinz-Peter Spahn & Achim Truger (ed.), 2008. "Finance-led Capitalism? Macroeconomic Effects of Changes in the Financial Sector," Conference proceedings of the Research Network Macroeconomics and Macroeconomic Policies (FMM), IMK at the Hans Boeckler Foundation, Macroeconomic Policy Institute, volume 11, number 11-2008, July.
    14. De Grauwe, Paul, 2016. "Economics of Monetary Union," OUP Catalogue, Oxford University Press, edition 11, number 9780198739876, Decembrie.
    15. Arne J. Nagengast & Robert Stehrer, 2016. "The Great Collapse in Value Added Trade," Review of International Economics, Wiley Blackwell, vol. 24(2), pages 392-421, May.
    16. Shu-Heng Chen & Ragupathy Venkatachalam, 2017. "Agent-based modelling as a foundation for big data," Journal of Economic Methodology, Taylor & Francis Journals, vol. 24(4), pages 362-383, October.
    17. Edmond Malinvaud & Jean-Paul Fitoussi (ed.), 1980. "Unemployment in Western Countries," International Economic Association Series, Palgrave Macmillan, number 978-1-349-16407-3, December.
    18. Michael Peneder, 2017. "Competitiveness and industrial policy: from rationalities of failure towards the ability to evolve," Cambridge Journal of Economics, Oxford University Press, vol. 41(3), pages 829-858.
    19. Krugman, Paul, 1991. "Increasing Returns and Economic Geography," Journal of Political Economy, University of Chicago Press, vol. 99(3), pages 483-499, June.
    20. Dosi, Giovanni & Grazzi, Marco & Moschella, Daniele, 2015. "Technology and costs in international competitiveness: From countries and sectors to firms," Research Policy, Elsevier, vol. 44(10), pages 1795-1814.
    21. Isabelle Bensidoun & Sébastien Jean & Aude Sztulman, 2011. "International trade and income distribution: reconsidering the evidence," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 147(4), pages 593-619, November.
    22. Spaventa, Luigi & Giavazzi, Francesco, 2010. "Why the current account may matter in a monetary union: Lessons from the financial crisis in the Euro area," CEPR Discussion Papers 8008, C.E.P.R. Discussion Papers.
    23. Niels Johannesen & Gabriel Zucman, 2014. "The End of Bank Secrecy? An Evaluation of the G20 Tax Haven Crackdown," American Economic Journal: Economic Policy, American Economic Association, vol. 6(1), pages 65-91, February.
    24. Annamaria Simonazzi & Andrea Ginzburg & Gianluigi Nocella, 2013. "Economic relations between Germany and southern Europe," Cambridge Journal of Economics, Oxford University Press, vol. 37(3), pages 653-675.
    25. Ewa Karwowski & Mimoza Shabani & Engelbert Stockhammer, 2016. "Financialisation: Dimensions and determinants. A cross-country study," Working Papers PKWP1619, Post Keynesian Economics Society (PKES).
    26. Sandra M. Leitner & Robert Stehrer, 2015. "What Determines SMEs’ Funding Obstacles to Bank Loans and Trade Credits?," wiiw Working Papers 114, The Vienna Institute for International Economic Studies, wiiw.
    27. Arthur, W Brian, 1989. "Competing Technologies, Increasing Returns, and Lock-In by Historical Events," Economic Journal, Royal Economic Society, vol. 99(394), pages 116-131, March.
    28. Gabriel Zucman, 2014. "Taxing across Borders: Tracking Personal Wealth and Corporate Profits," Journal of Economic Perspectives, American Economic Association, vol. 28(4), pages 121-148, Fall.
    29. Mahdi Ghodsi, 2015. "Determinants of Specific Trade Concerns Raised on Technical Barriers to Trade," wiiw Working Papers 115, The Vienna Institute for International Economic Studies, wiiw.
    30. Jeffrey M Wooldridge, 2010. "Econometric Analysis of Cross Section and Panel Data," MIT Press Books, The MIT Press, edition 2, volume 1, number 0262232588, December.
    31. Engelbert Stockhammer & Rafael Wildauer, 2016. "Debt-driven growth? Wealth, distribution and demand in OECD countries," Cambridge Journal of Economics, Oxford University Press, vol. 40(6), pages 1609-1634.
    32. Heinrich, Torsten, 2014. "Standard wars, tied standards, and network externality induced path dependence in the ICT sector," Technological Forecasting and Social Change, Elsevier, vol. 81(C), pages 309-320.
    33. Emi Nakamura & Jón Steinsson, 2018. "Identification in Macroeconomics," Journal of Economic Perspectives, American Economic Association, vol. 32(3), pages 59-86, Summer.
    34. Nauro F. Campos & Corrado Macchiarelli, 2018. "Symmetry and Convergence in Monetary Unions," LEQS – LSE 'Europe in Question' Discussion Paper Series 131, European Institute, LSE.
    35. Peter H. Egger & Sergey Nigai & Nora M. Strecker, 2019. "The Taxing Deed of Globalization," American Economic Review, American Economic Association, vol. 109(2), pages 353-390, February.
    36. Beck, Nathaniel & Katz, Jonathan N., 1995. "What To Do (and Not to Do) with Time-Series Cross-Section Data," American Political Science Review, Cambridge University Press, vol. 89(3), pages 634-647, September.
    37. Matthieu Cristelli & Andrea Tacchella & Luciano Pietronero, 2015. "The Heterogeneous Dynamics of Economic Complexity," PLOS ONE, Public Library of Science, vol. 10(2), pages 1-15, February.
    38. Claudius Graebner & Philipp Heimberger & Jakob Kapeller & Florian, 2018. "Measuring Economic Openness: A review of existing measures and empirical practices," ICAE Working Papers 84, Johannes Kepler University, Institute for Comprehensive Analysis of the Economy.
    39. repec:dau:papers:123456789/4212 is not listed on IDEAS
    40. Frank Barry & Adele Bergin, 2012. "Inward Investment and Irish Exports over the Recession and Beyond," The World Economy, Wiley Blackwell, vol. 35(10), pages 1291-1304, October.
    41. Tim Goedemé & Diego Collado, 2016. "The EU Convergence Machine at Work. To the Benefit of the EU's Poorest Citizens?," Journal of Common Market Studies, Wiley Blackwell, vol. 54(5), pages 1142-1158, September.
    42. Alison Johnston & Aidan Regan, 2016. "European Monetary Integration and the Incompatibility of National Varieties of Capitalism," Journal of Common Market Studies, Wiley Blackwell, vol. 54(2), pages 318-336, March.
    43. Alberto Bagnai & Christian Alexander Mongeau Ospina, 2018. "Monetary integration vs. real disintegration: single currency and productivity divergence in the euro area," Journal of Economic Policy Reform, Taylor and Francis Journals, vol. 21(4), pages 353-367, October.
    44. Bakk-Simon, Klára & Borgioli, Stefano & Giron, Celestino & Hempell, Hannah Sabine & Maddaloni, Angela & Recine, Fabio & Rosati, Simonetta, 2012. "Shadow banking in the Euro area: an overview," Occasional Paper Series 133, European Central Bank.
    45. Aidan Regan & Samuel Brazys, 2018. "Celtic Phoenix or Leprechaun Economics? The Politics of an FDI-led Growth Model in Europe," New Political Economy, Taylor & Francis Journals, vol. 23(2), pages 223-238, March.
    46. David Cobham (ed.), 2007. "The Travails of the Eurozone," Palgrave Macmillan Books, Palgrave Macmillan, number 978-0-230-80147-9, December.
    47. Engelbert Stockhammer, 2015. "Rising inequality as a cause of the present crisis," Cambridge Journal of Economics, Oxford University Press, vol. 39(3), pages 935-958.
    48. Christina D. Romer & David H. Romer, 2017. "New Evidence on the Aftermath of Financial Crises in Advanced Countries," American Economic Review, American Economic Association, vol. 107(10), pages 3072-3118, October.
    49. Nicholas Kaldor, 1980. "The Foundations of Free Trade Theory and their Implications for the Current World Recession," International Economic Association Series, in: Edmond Malinvaud & Jean-Paul Fitoussi (ed.), Unemployment in Western Countries, chapter 4, pages 85-100, Palgrave Macmillan.
    50. Olivier Blanchard & Francesco Giavazzi, 2002. "Current Account Deficits in the Euro Area: The End of the Feldstein Horioka Puzzle?," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 33(2), pages 147-210.
    51. Sebastian Leitner, 2015. "Effects of Income Inequality on Population Health and Social Outcomes at the Regional Level in the EU," wiiw Working Papers 113, The Vienna Institute for International Economic Studies, wiiw.
    52. Menno Broos & Krit Carlier & Jan Kakes & Eric Klaaijsen, 2012. "Shadow Banking: An Exploratory Study for the Netherlands," DNB Occasional Studies 1005, Netherlands Central Bank, Research Department.
    53. Cimoli, Mario & Porcile, Gabriel, 2016. "Productivity and structural change: structuralism and its dialogue with other heterodox currents," Libros de la CEPAL, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), number 43342, March.
    54. Pérez Caldentey, Esteban, 2016. "A time to reflect on opportunities for debate and dialogue between (neo)structuralism and heterodox schools of thought," Libros de la CEPAL, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), number 43336, March.
    55. Storm, Servaas & Naastepad, C.W.M., 2015. "Crisis and recovery in the German economy: The real lessons," Structural Change and Economic Dynamics, Elsevier, vol. 32(C), pages 11-24.
    56. M J Artis & W Zhang, 2001. "Core and Periphery in EMU: A Cluster Analysis," Economic Issues Journal Articles, Economic Issues, vol. 6(2), pages 47-58, September.
    57. Leonhard Dobusch & Jakob Kapeller, 2012. "Heterodox United vs. Mainstream City? Sketching a Framework for Interested Pluralism in Economics," Journal of Economic Issues, Taylor & Francis Journals, vol. 46(4), pages 1035-1058.
    58. Bakk-Simon, Klára & Borgioli, Stefano & Giron, Celestino & Hempell, Hannah S. & Maddaloni, Angela & Recine, Fabio & Rosati, Simonetta, 2012. "Shadow banking in the Euro area: an overview," Occasional Paper Series 133, European Central Bank.
    59. Giovanni Dosi & Keith Pavitt & Luc Soete, 1990. "The Economics of Technical Change and International Trade," LEM Book Series, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy, number dosietal-1990, April.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Kapeller, Jakob & Gräbner, Claudius & Heimberger, Philipp, 2019. "Economic polarisation in Europe: Causes and policy options," ifso working paper series 5, University of Duisburg-Essen, Institute for Socioeconomics (ifso).
    2. Claudius Gräbner & Philipp Heimberger & Jakob Kapeller & Bernhard Schütz, 2020. "Structural change in times of increasing openness: assessing path dependency in European economic integration," Journal of Evolutionary Economics, Springer, vol. 30(5), pages 1467-1495, November.
    3. Farkas Beáta, 2018. "What can institutional analysis say about capitalism in Central and Eastern Europe? Results and limitations," International Journal of Management and Economics, Warsaw School of Economics, Collegium of World Economy, vol. 54(4), pages 283-290, December.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Claudius Gräbner & Philipp Heimberger & Jakob Kapeller & Bernhard Schütz, 2020. "Structural change in times of increasing openness: assessing path dependency in European economic integration," Journal of Evolutionary Economics, Springer, vol. 30(5), pages 1467-1495, November.
    2. Kapeller, Jakob & Gräbner, Claudius & Heimberger, Philipp, 2019. "Economic polarisation in Europe: Causes and policy options," ifso working paper series 5, University of Duisburg-Essen, Institute for Socioeconomics (ifso).
    3. Claudius Graebner & Jakob Hafele, 2020. "The emergence of core-periphery structures in the European Union: a complexity perspective," ICAE Working Papers 113, Johannes Kepler University, Institute for Comprehensive Analysis of the Economy.
    4. Claudius Gräbner & Philipp Heimberger & Jakob Kapeller & Bernhard Schütz, 2017. "Is Europe disintegrating? Macroeconomic divergence, structural polarization, trade and fragility," Economics working papers 2017-15, Department of Economics, Johannes Kepler University Linz, Austria.
    5. Claudius Gräbner-Radkowitsch & Dennis Tamesberger & Philipp Heimberger & Timo Kapelari & Jakob Kapeller, 2022. "Trade Models In The European Union," Economic Annals, Faculty of Economics and Business, University of Belgrade, vol. 67(235), pages 7-36, October –.
    6. Philipp Heimberger, 2018. "The Dynamic Effects of Fiscal Consolidation Episodes on Income Inequality," wiiw Working Papers 147, The Vienna Institute for International Economic Studies, wiiw.
    7. Philipp Heimberger, 2020. "The dynamic effects of fiscal consolidation episodes on income inequality: evidence for 17 OECD countries over 1978–2013," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 47(1), pages 53-81, February.
    8. Philipp Heimberger & Jakob Kapeller, 2017. "The performativity of potential output: pro-cyclicality and path dependency in coordinating European fiscal policies," Review of International Political Economy, Taylor & Francis Journals, vol. 24(5), pages 904-928, September.
    9. Walter Paternesi Meloni, 2021. "The price vs. non-price competitiveness conundrum: a post-Keynesian comparative political economy analysis," Working Papers PKWP2109, Post Keynesian Economics Society (PKES).
    10. Karsten Kohler & Engelbert Stockhammer, 2022. "Growing differently? Financial cycles, austerity, and competitiveness in growth models since the Global Financial Crisis," Review of International Political Economy, Taylor & Francis Journals, vol. 29(4), pages 1314-1341, July.
    11. Claudius Gräbner & Philipp Heimberger & Jakob Kapeller, 2019. "Economic Polarisation in Europe: Causes and Options for Action," wiiw Research Reports 440, The Vienna Institute for International Economic Studies, wiiw.
    12. Claudius Gräbner & Philipp Heimberger & Jakob Kapeller, 2020. "Pandemic pushes polarisation: the Corona crisis and macroeconomic divergence in the Eurozone," Economia e Politica Industriale: Journal of Industrial and Business Economics, Springer;Associazione Amici di Economia e Politica Industriale, vol. 47(3), pages 425-438, September.
    13. Emanuele Brancati & Raffaele Brancati & Dario Guarascio & Andrea Maresca & Manuel Romagnoli & Antonello Zanfei, 2018. "Firm-level Drivers of Export Performance and External Competitiveness in Italy," European Economy - Discussion Papers 087, Directorate General Economic and Financial Affairs (DG ECFIN), European Commission.
    14. Benjamin Jungmann, 2023. "Growth drivers in emerging capitalist economies: building blocks for a post-Keynesian analysis and an empirical exploration of the years before and after the Global Financial Crisis," Review of Evolutionary Political Economy, Springer, vol. 4(2), pages 349-386, July.
    15. Mealy, Penny & Teytelboym, Alexander, 2017. "Economic Complexity and the Green Economy," INET Oxford Working Papers 2018-03, Institute for New Economic Thinking at the Oxford Martin School, University of Oxford, revised Feb 2019.
    16. Dosi, Giovanni & Roventini, Andrea & Russo, Emanuele, 2019. "Endogenous growth and global divergence in a multi-country agent-based model," Journal of Economic Dynamics and Control, Elsevier, vol. 101(C), pages 101-129.
    17. repec:hal:spmain:info:hdl:2441/46k9rkvut99i7qnn4vqm25t53b is not listed on IDEAS
    18. Engelbert Stockhammer & Andre Novas Otero, 2023. "A tale of housing cycles and fiscal policy, not competitiveness. Growth drivers in Southern Europe," New Political Economy, Taylor & Francis Journals, vol. 28(3), pages 483-505, May.
    19. Philipp Heimberger, 2018. "What Explains Austria’s Export Market Performance?," wiiw Working Papers 149, The Vienna Institute for International Economic Studies, wiiw.
    20. Mealy, Penny & Teytelboym, Alexander, 2022. "Economic complexity and the green economy," Research Policy, Elsevier, vol. 51(8).
    21. Enno Schröder, 2015. "Eurozone Imbalances: Measuring the Contribution of Expenditure Switching and Expenditure Volumes 1990-2013," Working Papers 1508, New School for Social Research, Department of Economics, revised Sep 2015.

    More about this item

    Keywords

    Europe; path dependency; European integration; economic openness; competitiveness;
    All these keywords.

    JEL classification:

    • B5 - Schools of Economic Thought and Methodology - - Current Heterodox Approaches
    • F6 - International Economics - - Economic Impacts of Globalization
    • F45 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Macroeconomic Issues of Monetary Unions

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:imk:fmmpap:39-2018. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sabine Nemitz (email available below). General contact details of provider: https://edirc.repec.org/data/fmbocde.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.