The impact of the recovery fund on EU regions: a spatial general equilibrium analysis

Javier Barbero, Andrea Conte, Francesca Crucitti, Nicholas-Joseph Lazarou, Stelios Sakkas and Simone Salotti

Regional Studies, 2024, vol. 58, issue 2, 336-349

Abstract: We use a spatial general equilibrium model to assess the macroeconomic and distributional impact of the European Commission’s Recovery and Resilience Facility (RRF). We employ two alternative regional distributions of investments: one based on the regional share of population only, and the other based on Cohesion Policy criteria. Our results suggest that the disbursement of RRF grants would lead to an increase in the European Union’s gross domestic product (GDP) of approximately 0.85% in 2026, corresponding to a present value GDP multiplier of 1.22. The latter rises to 3.25 in the long run. Under the population criterion, GDP impacts are higher relative to the Cohesion criterion, at the detriment of territorial cohesion.

Date: 2024
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DOI: 10.1080/00343404.2022.2123467

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