UNU-MERIT » Structural asymmetries at the roots of the eurozone crisis. Implications for EU industrial policies from a post-Keynesian perspective.
Structural asymmetries at the roots of the eurozone crisis. Implications for EU industrial policies from a post-Keynesian perspective.
In this paper, we analyze and try to measure productive and technological asymmetries between peripheral and central economies in the eurozone. We assess the effects such asymmetries will likely bring about on center-periphery divergence/convergence patterns, and derive some implications as to the design of future industrial policy at European level. We stress that future EU industrial policy should be regionally-focused and specifically target structural changes in the periphery as the main way to favor center-periphery convergence and avoid re-appearance of past external imbalances. To this end, a wide battery of industrial policy tools should be considered, ranging from subsidies and fiscal incentives to innovative firms, public financing of R&D efforts, sectoral policies and public procurements for home-produced goods. All in all, future EU industrial policy should be much more interventionist than it currently is, and dispose of much larger funds with respect to the present setting in order to effectively pursue both short-run stabilizing and long-run development goals.
Alberto Botta is currently Researcher in Economic Policy at the Mediterranean University of Reggio Calabria, Reggio Calabria, Italy. He is also Professor of development economics at Polytechnics University of Milan, monetary economics at University of Insubria, international economics at University of Pavia and Master Program on “Cooperation and Development”, Institute of Advanced Studies of Pavia. Alberto Botta teaches “economic integration and international cooperation” in the Master Program on “Cooperation and Development in the Middle East” held at the Bethlehem University, Bethlehem, Palestine. Alberto Botta’s main research fields are development macroeconomics and, more recently, financial instability and economic crisis in the eurozone. On these issues, Alberto Botta has published articles on scientific journals such as “Structural Change and Economic Dynamics”, “Metroeconomica”, “Review of Political Economy”, “Journal of post-Keynesian Economics” and “Review of Keynesian Economics”.