Potential Economic Impact of BRI: A Computable General Equilibrium Analysis

In this chapter, authors estimate the potential macroeconomic impact (defined as increase in national real GDP) of the BRI stakeholder countries by using the Global Trade Analysis Project (GTAP) model, which is a multi-region, multi-sector, comparative-static CGE model of the world economy, and its latest database. Macroeconomic impacts of the BRI corridors as a whole as well as the impacts of individual constituent overland and maritime economic corridors are estimated. Two conclusions emerge from the preliminary simulation results. First, trade liberalisation policies may generate higher economic benefits than reduction in transport costs. Second, land-locked countries such as Mongolia, Kazakhstan, and Nepal are likely to benefit the most from the BRI. With respect to the Maritime Silk Road (MSR), countries that are already well-embedded in the global maritime shipping networks such as Malaysia and Singapore are projected to benefit more than others.