Enduring the great recession: Economic integration in the European Union.

Unlabelled: Scholars have long feared that regional economic specialization, fostered by freer trade, would make the European Union vulnerable to economic downturn. The most acute concerns have been over the adoption of the common currency: by adopting the euro, countries renounce their ability to meet an asymmetric shock with independent revaluations of their currencies. We systematically test the prediction that regional specialization increases vulnerability to economic downturn using a novel dataset that covers all of the EU's subnational regions and major sectors of the economy between 2000 and 2013.