Structural Change, Innovation and Growth in the Single EU Market

Paul Welfens and Dora Borbély ()
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Dora Borbély: EUropäisches Institut für Internationale Wirtschaftsbeziehungen (EIIW)

No disbei170, EIIW Discussion paper from Universitätsbibliothek Wuppertal, University Library

Abstract: An analysis of structural change along its main dimensions (relative goods and factor prices, shifts in sectoral output and employment shares, and the respective contributions of process and product innovation) is first presented. Next, capital mobility is introduced as well as Sinn's controversial characterization of the large German trade surplus against the backdrop of the increase in international outsourcing. The authors then flesh out the model to show that growth, at least in the medium term, hinges on both demand and supply-side dynamics, with the structure of output and the intensity of trade contributing to growth. Finally, in this exegesis on structural change, innovation, and growth, some dynamic Schumpeterian considerations are offered. The bottom line is that the ability of firms from EU15 countries to rely on imported intermediate products from EU accession countries is the basis for gaining competitiveness in both the global economy and vis--Â -vis the United States. It enables them to become more price competitive while restructuring domestic outsourcing in the EU15, making it more focused on producing technologically advanced intermediate products than heretofore. A detailed set of empirical regularities are investigated along two main dimensions: innovation traits and structural change, and Sinn's bazaar effect. International competitiveness is evaluated on the basis of revealed comparative advantage indicators (RCAs) and export unit values (EUVs).

Keywords: Open Economy Macroeconomics; Innovation Dynamics; Structural Change (search for similar items in EconPapers)
JEL-codes: F41 F43 O33 (search for similar items in EconPapers)
Pages: 53 Pages
Date: 2009-08
New Economics Papers: this item is included in nep-ino, nep-knm and nep-opm
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Chapter: Structural Change, Innovation and Growth in the Single EU Market (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:bwu:eiiwdp:disbei170

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