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Structural asymmetries at the roots of the eurozone crisis: what's new for industrial policy in the EU?

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  • Alberto Botta

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Abstract

In this paper, we analyze and try to measure productive and technological asymmetries between central and peripheral economies in the eurozone. We assess the effects such asymmetries would likely bring about on center–periphery divergence/convergence patterns, and derive some implications as to the design of future industrial policy at the European level. We stress that future European Union (EU) industrial policy should be regionally focused and specifically target structural changes in the periphery as the main way to favor center–periphery convergence and avoid the reappearance of past external imbalances. To this end, a wide battery of industrial policy tools should be considered ranging from subsidies and fiscal incentives to innovative firms, public financing of R&D efforts, sectoral policies, and public procurements for home-produced goods. All in all, future EU industrial policy should be much more interventionist than it currently is, and dispose of much larger funds with respect to the present setting in order to effectively pursue both short-run stabilization and long-run development goals.

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  • Alberto Botta, 2014. "Structural asymmetries at the roots of the eurozone crisis: what's new for industrial policy in the EU?," PSL Quarterly Review, Economia civile, vol. 67(269), pages 169-216.
  • Handle: RePEc:psl:pslqrr:2014:23
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    2. Servaas Storm & C.W.M. Naastepad, 2015. "NAIRU economics and the Eurozone crisis," International Review of Applied Economics, Taylor & Francis Journals, vol. 29(6), pages 843-877, November.
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    4. Engelbert Stockhammer & Collin Constantine & Severin Reissl, 2016. "Explaining the Euro crisis: Current account imbalances, credit booms and economic policy in different economic paradigms," Working Papers PKWP1617, Post Keynesian Economics Society (PKES).
    5. Eckhard Hein & Daniel Detzer, 2015. "Post-Keynesian Alternative Policies to Curb Macroeconomic Imbalances in the Euro Area," Panoeconomicus, Savez ekonomista Vojvodine, Novi Sad, Serbia, vol. 62(2), pages 217-236, June.
    6. Giulio Guarini, 2016. "Macroeconomic and Technological Dynamics: a Structuralist-Keynesian Cumulative Growth Model," PSL Quarterly Review, Economia civile, vol. 69(276), pages 49-75.
    7. Carlo Panico, Francesco Purificato, Elvira Sapienza, 2015. "Benefici, problemi e prospettive dell’integrazione monetaria in Europa (Benefits, issues and future of monetary integration in Europe)," Moneta e Credito, Economia civile, vol. 68(271), pages 305-339.
    8. Wagener, Hans-Jürgen & Eger, Thomas, 2014. "Interne vs. externe Abwertung: Außenwirtschaftliches Ungleichgewicht im Eurosystem," Beiträge zur Jahrestagung 2014 (Goettingen) 107398, Verein für Socialpolitik, Ausschuss für Wirtschaftssysteme und Institutionenökonomik.

    More about this item

    Keywords

    Center–Periphery Structural Symmetries; EU Industrial Policy;

    JEL classification:

    • E12 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Keynes; Keynesian; Post-Keynesian
    • F15 - International Economics - - Trade - - - Economic Integration
    • O25 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Industrial Policy
    • O52 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Europe

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