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Structural Change in Times of Increasing Openness

Author

Listed:
  • Claudius Gräbner
  • Philipp Heimberger

    () (The Vienna Institute for International Economic Studies, wiiw)

  • Jakob Kapeller
  • Bernhard Schütz

Abstract

Assessing Path Dependency in European Economic Integration This paper analyses the dynamics of structural polarisation and macroeconomic convergence vs. 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 openness shocks on 26 EU countries, we develop a taxonomy of European economies that consists of core, periphery, financialised and Eastern European catch-up economies. As these four country groups have responded in a distinct way to the openness shocks imposed by European integration, we 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 polarisation and to promote macroeconomic convergence in Europe.

Suggested Citation

  • Claudius Gräbner & Philipp Heimberger & Jakob Kapeller & Bernhard Schütz, 2018. "Structural Change in Times of Increasing Openness," wiiw Working Papers 143, The Vienna Institute for International Economic Studies, wiiw.
  • Handle: RePEc:wii:wpaper:143
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    More about this item

    Keywords

    Europe; path dependency; European integration; economic openness; competitiveness;

    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

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