EconPapers    
Economics at your fingertips  
 

Growth Effects of Spatial Redistribution Policies

Calin Arcalean (), Gerhard Glomm () and Ioana Schiopu ()

No 3728, CESifo Working Paper Series from CESifo

Abstract: Regional income disparities have increased in many European countries recently, even as national and supra-national policy instruments were created to correct them. To explain these evolutions, we develop a two-region, two-sector model with migration and public investment in infrastructure and education. Accumulation and creation of new ideas and technologies as well as migration are at the core of differential regional growth. In this framework, we assess the effectiveness of structural funds, modelled on the EU policy. In a numerical example calibrated to Portugal, we find that, to diminish the initial gap in income per capita, the backward region needs to receive over 8% of its own GDP in structural funds, while the actual disbursements were around 4%. We also find that maximizing innovation in the backward region conflicts in the short run with the goal of maximizing its income per capita. Moreover, the rich region has an incentive to bias the allocation of structural funds towards human capital formation.

Keywords: two-region economy; structural change; migration; regional policy; European Union (search for similar items in EconPapers)
JEL-codes: O10 H70 R58 R12 (search for similar items in EconPapers)
Date: 2012
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7) Track citations by RSS feed

Downloads: (external link)
https://www.cesifo.org/DocDL/cesifo1_wp3728.pdf (application/pdf)

Related works:
Journal Article: Growth effects of spatial redistribution policies (2012) Downloads
Working Paper: Growth Effects of Spatial Redistribution Policies (2007) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_3728

Access Statistics for this paper

More papers in CESifo Working Paper Series from CESifo Contact information at EDIRC.
Bibliographic data for series maintained by Klaus Wohlrabe ().

 
Page updated 2020-08-08
Handle: RePEc:ces:ceswps:_3728