Modelling Spatial Economic Effects of Transport Infrastructure Policies: A Computable General Equilibrium Approach

The purpose of this doctoral thesis is to suggest and operationalise several important extensions and improvements in the methodology used to evaluate regional economic effects of the large-scale transport infrastructure and pricing policies. The main contributions are divided into the static modelling part and the dynamic modelling part. In the static modelling part, our focus is on the implications of the assumptions of partial capital mobility and wage rigidity for the evaluation of border-crossing infrastructure projects. In particular, we introduce a negative relationship between the regional real wage and the unemployment rate, usually called the "wage curve", into the model. We show that including these assumptions substantially increases the magnitude of the indirect effects predicted by the model. We also identify and describe the mechanisms governing these effects. In the dynamic modelling part, we make a first attempt to introduce full forward-looking dynamics into the spatial CGE modelling framework by specifying the intertemporal optimization problems of the households and the firms. This framework also allows us to represent incomplete capital mobility in a more plausible way than in the static model by introducing the costs of investment. We perform numerical simulations in order to study the properties of the model, and to understand the added value of this approach as compared to static analysis. Both models are employed to analyse the economic impacts of the Fehmarn Belt railway axis project, in particular the indirect effects thereof.