Discussion Papers

No.874 Simulating the decoupling world under Russia’s invasion of Ukraine: An application of IDE-GSM

by Satoru Kumagai, Kazunobu Hayakawa, Ikumo Isono, Toshitaka Gokan, Souknihlan Keola, Kenmei Tsubota and Hiroya Kubo

January 2023


The world appears to be divided into three blocs: the Chinese–Russian bloc, the Western alliance, and the rest of the world that remains neutral in the conflict between the former camps. This study estimates the economic impacts of “decoupling” scenarios on each country and region using a computable general equilibrium (CGE)-type simulation model called the geographical simulation model developed by the Institute of Developing Economies (IDE-GSM). Simulation results indicate that 1) the decoupling of Russia will not have a significant impact on the global economy, except in the mining sector, and 2) if China joins the Russian camp, the impact will be significant on the world economy, especially for Asian countries.

Keywords: Decoupling of the world, Simulation analysis, IDE-GSM

JEL classification: E27, F17, R12

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