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On the optimal design of place-based policies: A structural evaluation of EU regional transfers

Listed author(s):
  • Yashar Blouri, Maximilian v. Ehrlich

We quantify general equilibrium effects of place-based policies in a multiregion framework with mobility, trade and agglomeration economies. Using detailed data on EU transfers, we infer the local effects of different transfer types on productivity, income and transportation cost. Based on these estimates and the general equilibrium model we derive the spatial distribution of economic activity and the resulting aggregate welfare effects if (i) no transfers were paid and taxes set to zero, (ii) transfers were distributed uniformly, (iii) transfers were welfare-optimally distributed. Characterizing the optimal distributions, we reveal complementarities between transfer types and between transfers and local endowments.

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Paper provided by Universitaet Bern, Departement Volkswirtschaft in its series Diskussionsschriften with number dp1702.

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Date of creation: Oct 2017
Handle: RePEc:ube:dpvwib:dp1702
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