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Short and longer-term effects of European regional policy

Author

Listed:
  • Crucitti, Francesca
  • Lecca, Patrizio
  • Monfort, Philippe
  • Salotti, Simone

Abstract

We quantify the system-wide impact of the European Structural Funds 2014–20 using a large-scale spatial general equilibrium model, calibrated for 89 regions in the EU and the UK. We find that policies that stimulate private and public investment have larger and longer-lasting effects than demand-side policies. In the latter case, the model shows a rapid adjustment to the post-policy equilibrium, which limits the legacy effects of the interventions. In addition, we show the importance of agents’ expectations in assessing the impact of the interventions supported by the funds. A model with perfect foresight tends to predict smaller impacts than a model with myopic agents would imply. The regional distribution of the differences in GDP impact between the two variants of the model suggests that the largest deviations are recorded for net beneficiary regions, with interesting implications for perceived policy persistence, the nature of interventions, and their long-term effects.

Suggested Citation

  • Crucitti, Francesca & Lecca, Patrizio & Monfort, Philippe & Salotti, Simone, 2025. "Short and longer-term effects of European regional policy," Economic Analysis and Policy, Elsevier, vol. 86(C), pages 1748-1765.
    • Handle: RePEc:eee:ecanpo:v:86:y:2025:i:c:p:1748-1765
    DOI: 10.1016/j.eap.2025.04.036
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    More about this item

    Keywords

    Computable general equilibrium modelling; Regional economics; Cohesion policy;
    All these keywords.

    JEL classification:

    • C68 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computable General Equilibrium Models
    • D58 - Microeconomics - - General Equilibrium and Disequilibrium - - - Computable and Other Applied General Equilibrium Models
    • H76 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Other Expenditure Categories
    • R13 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General Equilibrium and Welfare Economic Analysis of Regional Economies

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