Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/213395
Authors: 
Gräbner, Claudius
Heimberger, Philipp
Kapeller, Jakob
Schütz, Bernhard
Year of Publication: 
2018
Series/Report no.: 
FMM Working Paper No. 39
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.
Subjects: 
Europe
path dependency
European integration
economic openness
competitiveness
Document Type: 
Working Paper

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