Pandemic pushes polarisation: the Corona crisis and macroeconomic divergence in the Eurozone

Claudius Gräbner-Radkowitsch, Philipp Heimberger and Jakob Kapeller

Economia e Politica Industriale: Journal of Industrial and Business Economics, 2020, vol. 47, issue 3, No 5, 425-438

Abstract: Abstract This paper discusses the uneven consequences of the macroeconomic fallout from the Coronavirus and related economic policy responses against the background of an analysis of longer-term macroeconomic divergence in the Eurozone. We show that the macroeconomic impact of the Corona crisis is estimated to be more severe in Southern Eurozone countries than in Northern Eurozone countries, which further reinforces the tendency of an increasing economic polarisation. This polarisation process can be traced back to existing differences in production structures and uneven vulnerabilities of the underlying growth models. As a consequence, any policy response to the Corona crisis that does not take the deeper problems of structural polarisation into account will suffer from limited impact in the medium to long run.

Keywords: Polarisation; Coronavirus; Eurozone (search for similar items in EconPapers)
JEL-codes: E6 F4 O3 (search for similar items in EconPapers)
Date: 2020
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Citations: View citations in EconPapers (9)

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Working Paper: Pandemic pushes polarisation: The Corona crisis and macroeconomic divergence in the Eurozone (2020)
Working Paper: Pandemic pushes polarisation: The Corona crisis and macroeconomic divergence in the Eurozone (2020)
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DOI: 10.1007/s40812-020-00163-w

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