This paper analyzes the role of costly spatial interaction between regional labor markets in the matching process. We adapt Shimer and Smith's (2000) assignment model with search frictions to an economy with two connected regions. We then show that the existence of labor mobility costs will...

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...

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 multi-sectoral, interregional general equilibrium model, is complex both in terms of its...

This paper derives a gravity equation for commuter flows from a spatial labor market model based on the seminal trade paper by Anderson and Van Wincoop (2003) and uses it to identify the effect of regional borders on commuting. This approach allows us to identify the relevant control variables...

This paper derives a gravity equation for commuter flows from a simple spatial labor market model, and uses it to identify the effect of regional borders on commuting. This structural approach allows us to identify the relevant control variables and sources of potential omitted variable bias....