New paper on polarization patterns in the EMU ( co-authored by Claudius Gräbner)

The paper Structural change in times of increasing openness: assessing path dependency in European economic integration has recently been published in the Journal of Evolutionary Economics. The paper shows how the current institutional framework in the European Monetary Union and its focus on increasing economic openness and competition among member states leads to a polarisation of important socio-economic variables. More precisely, using modern econometric techniques and tools from machine learning, the paper proposes a typology of countries where countries that react similarly to an increase of economic openness are grouped together. This results in four distinct groups: a core, a periphery, a financial centre and a group of catch-up economies. The paper concludes with proposing policies that could reduce competitive pressures and lead to a convergence across member states.

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