Economic Impacts of Economic Corridors in Mongolia: An Application of IDE-GSM

Discussion Papers

No.701

by Satoru Kumagai, Toshitaka Gokan and Souknilanh Keola

March 2018

ABSTRACT

In this paper, we tried to estimate the economic impacts of the Central Asia Regional E conomic Cooperation (CAREC) Economic Corridor 4a, 4b, and 4c projects, which enhance the connectivity between Mongolia and its surrounding countries, using a computational general equilibrium model based on spatial economics. The estimation results show that the economic impacts for Corridor 4b, which connects China and R ussia through Ulaanbaatar, the capital of Mongolia, are the highest compared with the other two corridors. Apart from Mongolia, Corridor 4b also economically impacts China, EU and Russia; thus, cooperation among these four parties might be a suitable arrangement for development. The evaluation of large-scale economic development of corridors is not very easy without proper evaluation tools.

Keywords:  simulation, new economic geography, Mongolia

JEL classification:  R12, R13, R42

Please note that discussion papers are works in various stages of progress and most have not been edited and proofread and may contain errors of fact or judgment. Revised versions of these papers may subsequently appear in more formal publication series. The views expressed in this publication are those of the author(s). The IDE does not guarantee the accuracy of the data included and accepts no responsibility for any consequences arising from its use.