Modelling regional labour market dynamics: Participation, employment and migration decisions in a spatial CGE model for the EU

This paper outlines how regional labour market adjustments to macroeconomic and policy shocks are modelled in RHOMOLO through participation, employment and migration decisions of workers. RHOMOLO, being a multisectoral, inter-regional general equilibrium model, is complex both in terms of its dimensionality and the modelling of spatial interactions through trade flows and factor mobility. The modelling of the labour market is therefore onstrained by the tractability and computational solvability of the model. The labour market module consists of individual labour participation decisions, including the extensive margin (to participate or not) and the intensive margin (hours of work). Unemployment is determined through a wage curve and inter-regional labour migration decisions are modelled in a discrete-choice framework, with backward-looking expectations.JRC.J.2-Knowledge for Growt

Credit guarantee schemes for SME lending in Western Europe

This report discusses the activity of credit guarantee schemes (CGSs) in Western Europe and presents an analysis based on a novel survey, conducted by the European Investment Bank (EIB) Group , among 18 credit guarantee organisations in 13 countries and 33 banks operating in 17 countries. The report aims at providing a deeper insight into the driving motives and operational mechanisms of CGSs, and the financial intermediaries that use them. The current publication is a successor of an earlier report, published in 2014 by the European Bank Coordination "Vienna Initiative" Working Group on CGSs (EBCI, 2014), which provides a comprehensive overview on the use of CGSs for Small- and Medium-sized Enterprise (SME) lending in Central, Eastern and South-Eastern Europe (CESEE)

Macroeconomic Modelling of R&D and Innovation Policies: An application of RHOMOLO and QUEST

This paper presents and applies a dynamic spatial computable general equilibrium model - RHOMOLO - to assess the impact of research, technological development and innovation policies in the EU. RHOMOLO is parameterised by econometrically estimating the relationship between regional productivity and R&D intensity by applying the technology catch-up model proposed by Benhabib and Spiegel (2005) to the EU-regional context. Our simulation results suggest that a dynamic spatial computable general equilibrium approach is particularly useful for handling 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. The paper shows the strengths and limitations of the approach, and the advantages of aligning the spatially and sectorally disaggregated models with more aggregated dynamic macro models.JRC.J.2-Knowledge for Growt

Modelling regional labour market dynamics: Participation, employment and migration decisions in a spatial CGE model for the EU

This paper models regional labour market adjustments to macro-economic and policy shocks through participation, employment and migration decisions of workers in the regional CGE model Rhomolo. Being a multi-sectoral, inter-regional general equilibrium model, Rhomolo is complex both in terms of its dimensionality and the modelling of spatial interactions through trade flows and factor mobility. The modelling of the labour market is therefore constrained by the requirement to keep the model tractable and computational solvable. The labour market setup consists of individual labour participation decisions, including the extensive margin (to participate or not) and the intensive margin (hours of work). A wage-curve determining unemployment is parameterised and econometrically estimated on the country level. Inter-regional labour migration is modelled in a discrete-choice framework, with backward-looking expectationsJRC.J.2-Knowledge for Growt

DSP-free and real-time NRZ transmission of 50Gb/s over 15km SSMF and 64Gb/s back-to-back with a 1.3um VCSEL

We demonstrate and analyze 50 Gb/s non-return-to-zero (NRZ) transmission over 15 km of standard single-mode fiber (SSMF), 60-Gb/s NRZ transmission over 5 km of SSMF and up to 64-Gb/s NRZ back-to-back using a directly modulated short-cavity long-wavelength single-mode vertical-cavity surface-emitting laser (VCSEL) emitting at 1326 nm. Owing to an analog 6-tap transmit feedforward equalizer, the link can operate without digital signal processing. In all three cases, real-time bit error ratio measurements below the 7% overhead hard-decision forward error correction threshold are demonstrated when transmitting a pseudorandom bit sequence with a period of 2(7) - 1 bits. In addition, we analyze the interplay between the residual fiber chromatic dispersion at the operating wavelength of the VCSEL and the chirp due to direct modulation. These results demonstrate how O-band, short-cavity long-wavelength single-mode VCSELs can be used in intradata center networks, as well as in interdata center networks at reaches below 15 km

Modelización de la dinámica en mercados de trabajo regionales: participación, empleo y decisiones de migración en un modelo espacial de EGC para la UE

Este "paper" describe cómo los ajustes en los mercados de trabajo regionales tanto a los "shocks" de política como macroeconómicos se modelizan en RHOMOLO a través de decisiones de los trabajadores sobre participación, empleo y migración. RHOMOLO, como modelo de equilibrio general multisectorial e interregional es complejo tanto en términos de dimensionalidad como de modelización de interacciones espaciales a través de flujos de comercio y movilidad de factores. La modelización del mercado de trabajo está por ello limitada tanto por la capacidad computacional como por la facilidad para obtener una solución (en forma de expresión matématica, en forma reducida) del modelo. El módulo del mercado de trabajo consiste en decisiones de participación individuales, incluyendo el margen extensivo (participar o no) y el margen intensivo (horas de trabajo). El desempleo se determina a través de la curva de salarios y las decisiones de migración interregional se modelizan en un esquema de elección discreta basado en expectativas pasadas.This paper outlines how regional labour market adjustments to macro-economic and policy shocks are modelled in RHOMOLO through participation, employment and migration decisions of workers. RHOMOLO, being a multisectoral, inter-regional general equilibrium model, is complex both in terms of its dimensionality and the modelling of spatial interactions through trade flows and factor mobility. The modelling of the labour market is therefore constrained by the tractability and computational solvability of the model. The labour market module consists of individual labour participation decisions, including the extensive margin (to participate or not) and the intensive margin (hours of work). Unemployment is determined through a wage curve and inter-regional labour migration decisions are modelled in a discrete-choice framework, with backward-looking expectations

RHOMOLO-v2 Model Description: A spatial computable general equilibrium model for EU regions and sectors

This report presents the current version of the European Commission's spatial computable general equilibrium model RHOMOLO, developed by the Directorate-General Joint Research Centre (DG JRC) in collaboration with the Directorate-General for Regional and Urban Policy (DG REGIO) to undertake the ex-ante impact assessment of EU policies and structural reforms. The RHOMOLO model has been used with DG REGIO for the impact assessment of Cohesion Policy, and with the European Investment Bank for impact assessment of EU investment support policies. The structure of the model departs from standard computable general equilibrium models in several dimensions. First, it generalises the modelling of market interactions by introducing imperfect competition in products and labour markets. Second, it exploits the advantages of a full asymmetric bilateral trade cost matrix for all EU regions to capture a rich set of spatial market interactions and regional features. Third, it acknowledges the importance of space also for non-market interactions through an inter-regional knowledge spill-over mechanism originating from research and development activities within a country. This report describes the theoretical foundation of RHOMOLO-v2 (v2 = version 2), its mathematical structure, dynamics, data sources and calibration to allow the reader to approach the model and its outputs with a higher degree of awareness of its strength and limitations. Indeed, as for any general equilibrium model with a reasonable level of complexity, in RHOMOLO it is often challenging to track the mechanisms at work after a policy shock and clearly disentangle causes and effects because of the high number of channels of adjustment and the presence of many feedback effects. The purpose of this documentation is thus to provide a compass to the reader to sail safely through its many equations, assumptions and connections.JRC.B.3-Territorial Developmen