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

Author

Listed:
  • Claudius Graebner

    (Institute for Comprehensive Analysis of the Economy, Johannes Kepler University Linz, Austria)

  • Philipp Heimberger

    (Vienna Institute for International Economic Studies)

  • Jakob Kapeller

    (Institute for Comprehensive Analysis of the Economy, Johannes Kepler University Linz, Austria)

  • Bernhard Schuetz

    (Department of Economics, Johannes Kepler University Linz)

Abstract
This paper analyzes the dynamics of structural polarization and macroeconomic conver- gence 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 Euro- pean economies that consists of core, periphery, financialized 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 polarization and to promote macroeconomic convergence in Europe.

Suggested Citation

  • Claudius Graebner & Philipp Heimberger & Jakob Kapeller & Bernhard Schuetz, 2018. "Structural change in times of increasing openness: assessing path dependency in European economic integration," ICAE Working Papers 76, Johannes Kepler University, Institute for Comprehensive Analysis of the Economy.
    • Handle: RePEc:ico:wpaper:76
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    References listed on IDEAS

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    More about this item

    Keywords

    structural change; economic integration; european union;
    All these keywords.

    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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