The Belt and Road Initiative: Reshaping Economic Geography in Central Asia?

38 Pages Posted: 9 Apr 2019

See all articles by Julia Bird

Julia Bird

World Bank

Mathilde Sylvie Maria Lebrand

World Bank

Anthony J. Venables

University of Oxford; Centre for Economic Policy Research (CEPR)

Date Written: April 8, 2019

Abstract

This paper develops a computable spatial equilibrium model of Central Asia and uses it to analyze the possible effects of the Belt Road Initiative on the economy of the region. The model captures international and subnational economic units and their connectivity to each other and the rest of the world. Aggregate real income gains from the Belt Road Initiative range from less than 2 percent of regional income if adjustment mechanisms take the form of conventional Armington and monopolistic competition, to around 3 percent if there are localization economies of scale and labor mobility. In the latter case, there are sizeable geographical variations in impact, with some areas developing clusters of economic activity with income increases of as much as 12 percent and a doubling of local populations, while other areas stagnate or even decline.

Suggested Citation

Bird, Julia and Lebrand, Mathilde Sylvie Maria and Venables, Anthony J., The Belt and Road Initiative: Reshaping Economic Geography in Central Asia? (April 8, 2019). World Bank Policy Research Working Paper No. 8807. Available at SSRN: https://ssrn.com/abstract=3368581

Julia Bird (Contact Author)

World Bank ( email )

1818 H Street, NW
Washington, DC 20433
United States

Mathilde Sylvie Maria Lebrand

World Bank ( email )

1818 H Street, NW
Washington, DC 20433
United States

Anthony J. Venables

University of Oxford ( email )

Mansfield Road
Oxford, Oxfordshire OX1 4AU
United Kingdom

Centre for Economic Policy Research (CEPR)

London
United Kingdom

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