Modelling Rural Economies (MORE)

Abstract

This paper suggests a spatial impact analysis for Nomenclature of Territorial Units for Statistics 3 (NUTS 3) regions with the objective of capturing local rural/urban effects of the Common Agricultural Policy (CAP). The paper first builds a set of rural-urban SAMs for twelve NUTS 3 regions distributed across the EU, using official statistics and expert information locally available. With the help of CAP's Pillar I and Pillar II information at NUTS3 level, the SAMs are further used in a linear Computable General Equilibrium model for simple policy simulations. Finally, we identify backward and forward structural linkages as well as key sectors in each regional economy and we design an experiment consisting in exogenously shocking the demand of any combination of endogenous activities in the original SAMs, in order to capture the impact of the Common Agricultural Policy (CAP) in each NUTS3 for 2007.