Reports

Discussion Papers

No.701 Economic Impacts of Economic Corridors in Mongolia: An Application of IDE-GSM

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

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