Pattern of trade and European economic integration
Résumé
In this article, the degree of integration between European countries is linked to the evolution of the pattern of trade. Evolution of the long-run sensitivity between European outputs is estimated by recursive Fully-Modified Ordinary Least Squares (FM-OLS) and compared to a recursive index of intra-industry trade. Significant correlations are found between integration and intra-industry trade share: positive for most countries but negative for others. The explanatory variable seems to be the initial intra-industry trade share.