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

Claudius Gräbner-Radkowitsch, Philipp Heimberger, Jakob Kapeller and Bernhard Schütz

Journal of Evolutionary Economics, 2020, vol. 30, issue 5, No 8, 1467-1495

Abstract: Abstract This paper analyzes the dynamics of structural polarization and macroeconomic divergence in the context of European integration, where the latter is primarily understood 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 four groups: core, periphery, and catching-up countries in Eastern Europe 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 are linked 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.

Keywords: Europe; Path dependency; European integration; Economic openness; Competitiveness (search for similar items in EconPapers)
JEL-codes: B5 F45 F6 (search for similar items in EconPapers)
Date: 2020
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Citations: View citations in EconPapers (23)

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Related works:
Working Paper: Structural change in times of increasing openness: Assessing path dependency in European economic integration (2019)
Working Paper: Structural change in times of increasing openness: assessing path dependency in European economic integration (2018)
Working Paper: Structural change in times of increasing openness: assessing path dependency in European economic integration (2018)
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DOI: 10.1007/s00191-019-00639-6

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