(European Economy. Economic Papers. 387. October 2009.
Brussels. PDF. 77pp. Tab. Graph. Ann. Bibliogr. Free.) KC-AI-09-387-EN-N ISBN: 978-92-79-13362-6 ISSN: 1725-3187
Summary for non-specialists(102 kB) More than a third of the EU budget is devoted to Cohesion Policy with the objective to foster economic and social cohesion in the European Union. Large-scale fiscal transfers are used to support investment in infrastructure, R&D and human capital.
This paper provides a model-based assessment of the potential macro-economic impact of these fiscal transfers using a DSGE model with semi-endogenous growth (Jones, 1995) 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. JEL classification: C53, E62, O30, O41 doi:10.2765/28883