The original purpose of the concept of innovation systems was to explain international specialisation patterns (Freeman 2004, Lundvall 1985), but the focus of its later development has gradually become the institutional analysis of innovative activities (Carlsson, 2006; Lundvall, 2007b)....

This chapter provides a description of the RHOMOLO model, a Spatial CGE model, developed and used by the European Commission for the impact assessment of policies at the regional level. Special emphasis is put on the innovation mechanisms underlying the model. Moreover, it discusses the...