43rd Congress of the European Regional Science Association: "Peripheries, Centres, and Spatial Development in the New Europe", 27th - 30th August 2003, Jyväskylä, Finland
The consequence of low level of infrastructure between the metropolitan area of Copenhagen and the Western and Southern areas - the counties of Vestsjælland and Storstrøm - is analysed. The metropolitan area of Copenhagen has experienced economic growth in the past decade and the demand for labour is rising. The analysis considers economic effects of the level of infrastructure, via the interaction with the labour market. An interregional general equilibrium model of the two regions has been constructed and a case with better infrastructure is analysed. The heterogeneous labour force differs with respect to taste of leisure and taste of residential location. In the model better infrastructure results in more willingness to search for a job in both regions, but infrastructure investment has to be financed, commuting generates emissions, and regional price effects influence the equilibrium. Costs and benefits are included in the modelling.