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Integrated Modelling of EU Transport Policy: Assessing Economic Growth Impacts from Social Marginal Cost Pricing and Infrastructure Investment

  • Economics


This paper combines SCENES, an EU transport model with E3ME, an EU macroeconometric model. Social Marginal Cost Pricing (SMCP) and fuel tax increases were combined with a concentrated TEN-T programme. Large externalities mean an SMCP with very high revenues; if recycled through reductions in other, distortional taxes, GDP significantly increases. France, Italy, and Finland have the largest GDP increases; Denmark, France, and Sweden have the largest employment increases. These results are critically dependent on the revenue recycling, demonstrating the importance of a full macroeconomic analysis, including the fiscal policy implications, combined with a detailed analysis of the transport impacts. © 2008 LSE and the University of Bath

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