RHOMOLO: A Dynamic General Equilibrium Modelling Approach to the Evaluation of the European Union's R&D Policies

Brandsma A. and Kancs d'A. RHOMOLO: a dynamic general equilibrium modelling approach to the evaluation of the European Union's R&D policies, Regional Studies. European integration changes the prospects of regional economies within the member states of the European Union in many ways. Cohesion Policy is the European Union's instrument to influence and complement the efforts made at the national level to ensure that the gains of economic integration reach everyone, and there are no regions left behind. This paper presents and applies a spatial general equilibrium model RHOMOLO to assess the impact of regional policy in the European Union. The presented simulation results highlight strengths of the approach taken in RHOMOLO in handling investments in research and development (R&D), infrastructure and spillovers of investments in the innovation capacity of the regions, both of which cannot be captured by models in which the spatial structure is not present.