Reports
Discussion Papers
No.702 Analysis of Economic Potentials of Infrastructure Developments in and around Bhutan
by Satoru Kumagai, Ikumo Isono and Kenmei Tsubota
March 2018
ABSTRACT
This paper conducts a simulation analysis of a spatial economic model in Southern A sia, with a particular focus on Bhutan. It indicates the potential impacts of different i nfrastructure investments on regional economies in Bhutan and the neighboring countries. The results reveal that road infrastructure investments within Bhutan will li kely increase regional accessibility, reshape the monocentric structure of the economy, and induce migration, thereby increasing the real wage for most of B hutan’s regions. Furthermore, road infrastructure investments within India have s ome spillover effects on Bhutan, which can be magnified by further reduction in non-tariff barriers. The comparison of the different scenarios indicates that the combination of projects may generate synergy effects.
Keywords: Simulation, new economic geography, Bhutan
JEL classification: R12, R13, R42
PDF available at http://hdl.handle.net/2344/00050314
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.