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Economic integration: Less data, more room for regional modelling?

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  • Andries Brandsma
  • d'Artis Kancs

Abstract

European integration changes the prospects of the regional economies within the Member States of the European Union in many ways. Cohesion policy is the EU’s instrument to influence and complement the efforts at the national level to ensure that regions are not left behind. This paper presents and applies a computable general equilibrium model developed for the purpose of assessing the impact of regional policy. The model encompasses the mechanisms of agglomeration and dispersion that emerge from the modern theories of economic geography and growth. It is particularly useful for handling investments in the infrastructure connecting the regions and spillovers of investments in the innovation capacity of the regions, both of which cannot be captured by models in which the spatial structure is not present. The paper discusses the strengths and limitations of the approach and the need to align the simulation results with those of more dynamic and aggregated models.

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Bibliographic Info

Paper provided by Economics and Econometrics Research Institute (EERI), Brussels in its series EERI Research Paper Series with number EERI RP 2013/09.

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Date of creation: 09 Sep 2013
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Handle: RePEc:eei:rpaper:eeri_rp_2013_09

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Related research

Keywords: Economic modelling; spatial dynamics; policy impact assessment; regional development; economic geography; spatial equilibrium; DSGE.;

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Cited by:
  1. D'Artis Kancs & Enrique Lopez-Bazo & Fabio Manca & Damiaan Persyn, 2012. "Modelling Migration and Regional Labour Markets: An Application of New Economic Geography Model Rhomolo," ERSA conference papers ersa12p808, European Regional Science Association.
  2. James Anderson, 2001. "Migration, FDI, and the Margins of Trade," EERI Research Paper Series, Economics and Econometrics Research Institute (EERI), Brussels EERI_RP_2001_05, Economics and Econometrics Research Institute (EERI), Brussels.

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