The RHOMOLO macroeconomic impact assessment of the European Defence Fund 2021-2027

Casas, Pablo and Christou, Tryfonas and García Rodríguez, Abián and Lazarou, Nicholas Joseph and Salotti, Simone (2025): The RHOMOLO macroeconomic impact assessment of the European Defence Fund 2021-2027.

Abstract

This paper presents a macroeconomic impact assessment of the European Defence Fund (EDF) expenditure planned for the programming period 2021-2027. The analysis is carried out with the spatial dynamic computable general equilibrium model called RHOMOLO. According to this analysis, EDF investments can generate significant economic returns in terms of Gross Domestic Product (GDP) and employment. These economic benefits are long-lasting and are still significant ten years after the end of the programme, thanks to the productivity gains resulting from the R&D activities financed by the policy. Impact assessments such as the one presented here allow for continuous policy adjustment and ensure informed decision-making by evaluating potential economic outcomes, thereby increasing transparency and accountability to EU citizens and Member States.

• Item Type: MPRA Paper
• Language: English
• Keywords: European Defence Fund, Macroeconomic impact assessment, Research and development, innovation, General equilibrium modelling.
• Subjects: C - Mathematical and Quantitative Methods > C6 - Mathematical Methods ; Programming Models ; Mathematical and Simulation Modeling > C68 - Computable General Equilibrium Models; O - Economic Development, Innovation, Technological Change, and Growth > O3 - Innovation ; Research and Development ; Technological Change ; Intellectual Property Rights > O30 - General; R - Urban, Rural, Regional, Real Estate, and Transportation Economics > R1 - General Regional Economics > R12 - Size and Spatial Distributions of Regional Economic Activity

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