Abstract
The European integration process has removed barriers to trade within Europe. We analyze
which integration step has most profoundly influenced the trending behavior of export
openness. We endogenously determine the single most decisive break in the trend, account
for strong cross-country heterogeneity and propose a new measure for the strength
of trend breaks. Highly open economies gain from both, monetary and real integration.
In sharp contrast, less open economies do not benefit from real integration and even suffer
from monetary integration. The major milestones for France, Germany, Italy and the
Netherlands are the Euro introduction, the Maastricht Treaty, the Exchange Rate Mechanism
I and the merge of EFTA and EEC to the European Economic Area, respectively. Our
empirical results have important implications for inner-European economic development,
as export openness feeds back into growth, unemployment and income convergence.
which integration step has most profoundly influenced the trending behavior of export
openness. We endogenously determine the single most decisive break in the trend, account
for strong cross-country heterogeneity and propose a new measure for the strength
of trend breaks. Highly open economies gain from both, monetary and real integration.
In sharp contrast, less open economies do not benefit from real integration and even suffer
from monetary integration. The major milestones for France, Germany, Italy and the
Netherlands are the Euro introduction, the Maastricht Treaty, the Exchange Rate Mechanism
I and the merge of EFTA and EEC to the European Economic Area, respectively. Our
empirical results have important implications for inner-European economic development,
as export openness feeds back into growth, unemployment and income convergence.
| Original language | English |
|---|---|
| Place of publication | Aarhus |
| Publisher | Department of Economics, Aarhus School of Business, Aarhus University |
| Number of pages | 21 |
| ISBN (Print) | 9788778824509 |
| ISBN (Electronic) | 9788778824516 |
| Publication status | Published - 2010 |
| Series | Working Paper |
|---|---|
| Number | 10-07 |
Keywords
- European Integration; Export Openness; Trends; Structural Breaks