The Potential Impact of EU Cohesion Policy Spending in the 2007-13 Programming Period: A Model-Based

Jan in 't Veld and Janos Varga

No 422, European Economy - Economic Papers 2008 - 2015 from Directorate General Economic and Financial Affairs (DG ECFIN), European Commission

Abstract: Summary for non-specialistsThis paper provides an assessment of the potential macro-economic impact of Cohesion Policy using a microfounded dynamic general equilibrium model with semi-endogenous growth and endogenous human capital accumulation and considers the impact of co-financing condition and faster absorption of funds.EU Cohesion policy supports investment in infrastructure, R and D and human capital in Europe's poorer regions. This paper provides a model-based assessment of the potential macro-economic impact of these fiscal transfers using a microfounded dynamic general equilibrium model with semi-endogenous growth and endogenous human capital accumulation. The simulations show the potential benefits of Structural Funds with significant output gains in the long run due to sizeable productivity improvements. Co-financing conditions are found to raise the long term output effects. Delays in spending profiles lead to lower gains.

Keywords: Janos Varga; Jan in 't Veld; The Potential Impact of EU Cohesion Policy Spend Cohesion Policy endogenous growth R and D dynamic general equilibrium modelling (search for similar items in EconPapers)
JEL-codes: C53 E62 O30 O41 (search for similar items in EconPapers)
Pages: 66 pages
Date: 2010-09
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (18)

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Persistent link: https://EconPapers.repec.org/RePEc:euf:ecopap:0422

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