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Production Integration in the European Union

Hakan Nordström and Harry Flam

No 6944, CESifo Working Paper Series from CESifo Group Munich

Abstract: Measured by trade in intermediate inputs, economic integration has increased between 2000 and 2014 between members of the European Union and even more with non-members. Integration is negatively related to economic size and positively to the number of years as a member. Germany is the largest hub in the production network and the centre of gravity has moved eastward. Older member states are increasingly exporting service inputs and new member states primary and manufacturing inputs. Wages are increasing faster in countries with low initial wages, indicating wage convergence as a result of production integration.

Keywords: global value chains; economic integration; input-output models; wage convergence (search for similar items in EconPapers)
JEL-codes: E10 F10 F60 J31 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-eur, nep-int and nep-lma
Date: 2018
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