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Pandemic pushes polarisation: The Corona crisis and macroeconomic divergence in the Eurozone

Author

Listed:
  • Jakob Kapeller

    (Institute for Socio-Economics, University of Duisburg-Essen, Germany; Institute for Comprehensive Analysis of the Economy, Johannes Kepler University Linz, Austria)

  • Claudius Graebner

    (Institute for Socio-Economics, University of Duisburg-Essen, Germany; Institute for Comprehensive Analysis of the Economy, Johannes Kepler University Linz, Austria; ZOE Institute for future-fit Economies, Bonn, Germany)

  • Philipp Heimberger

    (Institute for Comprehensive Analysis of the Economy, Johannes Kepler University Linz, Austria; Vienna Institute for International Economic Studies (wiiw), Vienna, Austria)

Abstract

This paper discusses the uneven consequences of the macroeconomic fallout from the coronavirus and related economic policy responses against the background of an analysis of longer-term macroeconomic divergence in the Eurozone. We show that the macroeconomic impact of the Corona crisis is estimated to be more severe in Southern Eurozone countries than in Northern Eurozone countries, which further reinforces the tendency of an increasing economic polarisation. This polarisation process can be traced back to existing differences in production structures and uneven vulnerabilities of the underlying growth models. As a consequence, any policy response to the Corona crisis that does not take the deeper problems of structural polarisation into account will suffer from limited impact in the medium to long run.

Suggested Citation

  • Jakob Kapeller & Claudius Graebner & Philipp Heimberger, 2020. "Pandemic pushes polarisation: The Corona crisis and macroeconomic divergence in the Eurozone," ICAE Working Papers 106, Johannes Kepler University, Institute for Comprehensive Analysis of the Economy.
    • Handle: RePEc:ico:wpaper:106
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    Cited by:

    1. Dario Guarascio & Jelena Reljic & Francesco Zezza, 2025. "Energy vulnerability and resilience in the EU: concepts, empirics and policy," Economia e Politica Industriale: Journal of Industrial and Business Economics, Springer;Associazione Amici di Economia e Politica Industriale, vol. 52(3), pages 683-726, September.
    2. Adriana Grenčíková & Valentinas Navickas & Marcel Kordoš & Matej Húževka, 2021. "Slovak business environment development under the industry 4.0 and global pandemic outbreak issues," Entrepreneurship and Sustainability Issues, VsI Entrepreneurship and Sustainability Center, vol. 8(4), pages 164-179, June.
    3. Michael Dauderstädt, 2022. "International Inequality and the COVID-19 Pandemic," Intereconomics: Review of European Economic Policy, Springer;ZBW - Leibniz Information Centre for Economics;Centre for European Policy Studies (CEPS), vol. 57(1), pages 40-46, January.
    4. RADU Maria-Tatiana & RĂDULESCU Magdalena & PENTESCU Alma & MARINOV Georgi & KHARLAMOVA Ganna, 2023. "The Effects of Immigration and Unemployment on European Countries: A Comparative Social and Fiscal Perspective," European Journal of Interdisciplinary Studies, Bucharest Economic Academy, issue 02, June.
    5. Reljic, Jelena & Zezza, Francesco, 2025. "Breaking the divide: Can public spending on social infrastructure boost female employment in Italy?," Economic Modelling, Elsevier, vol. 143(C).
    6. Athanasios Anastasiou & Nicholas Apergis & Athina Zervoyianni, 2024. "Pandemic, sentiments over COVID-19, and EU convergence," Empirical Economics, Springer, vol. 66(4), pages 1683-1707, April.
    7. Gräbner, Claudius & Hafele, Jakob, 2020. "The emergence of core-periphery structures in the European Union: A complexity perspective," ZOE Discussion Papers 6, ZOE. institute for future-fit economies, Bonn.
    8. Josef Abrhám & Milan Vošta, 2022. "Impact of the COVID-19 Pandemic on EU Convergence," JRFM, MDPI, vol. 15(9), pages 1-14, August.
    9. Vytautas Kuokštis & Ringailė Kuokštytė, 2023. "How Institutions Moderated the Pandemic's Economic Impact in EU Member States," Journal of Common Market Studies, Wiley Blackwell, vol. 61(2), pages 503-525, March.
    10. Davide Villani & Marta Fana, 2021. "Productive integration, economic recession and employment in Europe: an assessment based on vertically integrated sectors," Economia e Politica Industriale: Journal of Industrial and Business Economics, Springer;Associazione Amici di Economia e Politica Industriale, vol. 48(2), pages 137-157, June.
    11. Fontana, Giuseppe & Kamara, Mohamed Sheriff Hamid, 2023. "Towards monetary union in the Economic Community of West African States (ECOWAS): Better policy harmonisation and greater intra-trade are needed," Journal of Policy Modeling, Elsevier, vol. 45(1), pages 58-73.
    12. Samuel Klebaner & Anaïs Voy-Gillis, 2023. "The political economy of French industrial policymaking," Review of Evolutionary Political Economy, Springer, vol. 4(1), pages 49-74, April.
    13. Francesco Zezza & Dario Guarascio, 2024. "Fiscal policy, public investment and structural change: a P-SVAR analysis on Italian regions," Regional Studies, Taylor & Francis Journals, vol. 58(6), pages 1356-1373, June.

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    JEL classification:

    • E6 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook
    • F4 - International Economics - - Macroeconomic Aspects of International Trade and Finance
    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights

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