RHOMOLO has been used to illustrate the effect of a permanent demand‐side shock in the perturbed regions and the associated spillover effects in the non‐perturbed regions in the EU regional economies.

The analysis explores to what extent gradual upward pressure on wages generated by a domestic increase in demand alters the magnitude of the economic impacts in the long‐run and the degree to which this could result in changes in trade patterns. The study also investigates the impact of varying trade substitution elasticities and having either perfectly or imperfectly competitive product markets.

The article is freely available for download here. The full reference is the following: Lecca, P., Christensen, M., Conte, A., Mandras, G., and Salotti, S. (2020). Upward pressure on wages and the interregional trade spillover effects under demand-side shocks. Papers in Regional Science 99(1), 165-182.