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

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  • Gräbner, Claudius
  • Heimberger, Philipp
  • Kapeller, Jakob
  • Schütz, Bernhard

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

  • Gräbner, Claudius & Heimberger, Philipp & Kapeller, Jakob & Schütz, Bernhard, 2019. "Structural change in times of increasing openness: Assessing path dependency in European economic integration," VfS Annual Conference 2019 (Leipzig): 30 Years after the Fall of the Berlin Wall - Democracy and Market Economy 203487, Verein für Socialpolitik / German Economic Association.
  • Handle: RePEc:zbw:vfsc19:203487
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    Cited by:

    1. Svenja Flechtner & Claudius Gräbner, 2019. "The heterogeneous relationship between income and inequality: a panel co-integration approach," Economics Bulletin, AccessEcon, vol. 39(4), pages 2540-2549.
    2. Claudius Graebner & Dennis Tamesberg & Timo Kapelari & Philipp Heimberger & Jakob Kapeller, 2019. "Trade Models in the European Union," ICAE Working Papers 95, Johannes Kepler University, Institute for Comprehensive Analysis of the Economy.
    3. María del Carmen Ramos-Herrera & Simón Sosvilla-Rivero, 2020. "Fiscal Sustainability in Aging Societies: Evidence from Euro Area Countries," Sustainability, MDPI, Open Access Journal, vol. 12(24), pages 1-1, December.
    4. Randolph Luca Bruno & Elodie Douarin & Julia Korosteleva & Slavo Radosevic, 2019. "Determinants of Productivity Gap in the European Union: A Multilevel Perspective," LEM Papers Series 2019/25, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
    5. Amat Adarov & David Klenert & Robert Marschinski & Robert Stehrer, 2020. "Productivity Drivers: Empirical Evidence on the Role of Digital Capital, FDI and Integration," JRC Working Papers JRC122068, Joint Research Centre (Seville site).
    6. 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.
    7. Jakob Kapeller & Claudius Graebner & Philipp Heimberger, 2019. "Economic Polarisation in Europe: Causes and Policy Options," ICAE Working Papers 99, Johannes Kepler University, Institute for Comprehensive Analysis of the Economy.

    More about this item

    JEL classification:

    • E14 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Austrian; Evolutionary; Institutional
    • E6 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook
    • F15 - International Economics - - Trade - - - Economic Integration
    • F4 - International Economics - - Macroeconomic Aspects of International Trade and Finance
    • L52 - Industrial Organization - - Regulation and Industrial Policy - - - Industrial Policy; Sectoral Planning Methods

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