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The impact of Cohesion Policy 2007-2015 in EU regions: Simulations with the RHOMOLO Interregional Dynamic General Equilibrium Model

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In this paper we assess the system-wide economic impact of the key financial instruments adopted by the European Union for the implementation of the regional policy: The Structural funds and The Cohesion Funds. We take a bottom-up approach by aggregating the 86 categories of expenditures defined in the Structural and Cohesion Funds into six main policy variables. The outcomes of the simulations are the results of a combination of demand-and-supply-side shocks that are implemented into the RHOMOLO spatial and dynamic general equilibrium model calibrated on a set of inter-regional Social Accounting Matrices for the year 2010. In our analysis we document the direct, indirect, and general equilibrium effects of the EU regional policy at the regional, national, and EU level. In the short-run, our simulation exercise suggests a pronounced variegate patters across EU regions. In the long-run, a more homogenous spatial distribution is detected. Moreover, we identify and quantify the interregional spillover effects arising from trade links and capital mobility.

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  • Francesco Di Comite & Patrizio Lecca & Philippe Monfort & Damiaan Persyn & Violeta Piculescu, 2018. "The impact of Cohesion Policy 2007-2015 in EU regions: Simulations with the RHOMOLO Interregional Dynamic General Equilibrium Model," JRC Working Papers on Territorial Modelling and Analysis 2018-03, Joint Research Centre.
    • Handle: RePEc:ipt:termod:201803
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    2. Patrizio Lecca & Martin Christensen & Andrea Conte & Giovanni Mandras & Simone Salotti, 2020. "Upward pressure on wages and the interregional trade spillover effects under demand‐side shocks," Papers in Regional Science, Wiley Blackwell, vol. 99(1), pages 165-182, February.
    3. Francesco Di Comite & Olga Diukanova & Giovanni Mandras & Javier Gómez Prieto, 2018. "The RHOMOLO economic impact assessment of the R&I and Low-Carbon ERDF Investment programme in Apulia, Italy," JRC Working Papers on Territorial Modelling and Analysis 2018-04, Joint Research Centre.
    4. Carlo Gianelle & Fabrizio Guzzo & Javier Barbero & Simone Salotti, 2022. "The economic implications of Smart Specialisation governance: a general equilibrium analysis for Italy 2014-2020," JRC Working Papers on Territorial Modelling and Analysis 2022-05, Joint Research Centre.
    5. Crucitti, Francesca & Lazarou, Nicholas-Joseph & Monfort, Philippe & Salotti, Simone, 2023. "Where does the EU cohesion policy produce its benefits? A model analysis of the international spillovers generated by the policy," Economic Systems, Elsevier, vol. 47(3).
    6. Patrizio Lecca & Damiaan Persyn & Andrea Conte & Simone Salotti, 2018. "Cohesion Policy 2007-2015: The RHOMOLO assessment," JRC Research Reports JRC114185, Joint Research Centre.

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    More about this item

    Keywords

    rhomolo; region; growth; cohesion policy; modelling; general equilibrium;
    All these keywords.

    JEL classification:

    • C54 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Quantitative Policy Modeling
    • C68 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computable General Equilibrium Models
    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • 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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