Regional Unemployment and Welfare Effects of the EU Transport Policies: Recent Results from an Applied General Equilibrium Model

The spatial effects of the European infrastructure policy, especially in relation with the cohesion objective, constitute a research question of particular interest for the policymakers, as can, for instance, be inferred from the significant number of large-scale research projects that incorporate this issue. These projects have a general focus on the EU transport policy, but differ in research questions and the indicators required to be produced by the employed models. The common feature is that the actual policy measures, such as building the Trans-European Networks, revitalizing railways, implementing effective road pricing, etc., are first transferred into an economically treatable indicator of interregional transport costs. An economic model is then needed that can explicitly incorporate this information and calculate the policy impact on regional welfare, its efficiency and equity effects. A successful model capable of taking account of changing transport infrastructure is CGEurope model introduced in Bröcker (1998). This is a multiregional (up to 1,400 regions covering the whole world) computable general equilibrium model constructed specifically for a transport policy analysis. Following the recent demands from the policymakers in the field of European infrastructure development, several extensions of the model are currently being introduced.