A model-based assessment of the macroeconomic impact of EU structural funds on the new Member States

Janos Varga and Jan in 't Veld

No 371, European Economy - Economic Papers 2008 - 2015 from Directorate General Economic and Financial Affairs (DG ECFIN), European Commission

Abstract: This paper gives a model-based analysis of the potential macro-economic impact of European Union Structural and Cohesion Funds payments on the economies of the new Member States. The model used is a four-region DSGE model with human capital accumulation and endogenous technological change. The framework that we adopt is the Jones (2005) extension of the endogenous growth model, which uses a variety approach for modelling knowledge investment. The EU funds average around 1.5 percent of GDP and are used for investment in infrastructure, human capital and R&D. The model simulations show this can lead to significant gains in output, both in the short as well as in the long run.

Keywords: Fiscal transfers; Structural Funds; public investment; DSGE modelling; Varga; in 't Veld (search for similar items in EconPapers)
JEL-codes: E62 H50 O11 O41 (search for similar items in EconPapers)
Pages: 34 pages
Date: 2009-03
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

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Persistent link: https://EconPapers.repec.org/RePEc:euf:ecopap:0371

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