A recursive networking economic analysis of international economic corridors: IMEEC and INSTC

The expansion of the International North-South Transport Corridor (INSTC) and the introduction of the India-Middle East-Europe Economic Corridor (IMEEC) are of great significance in terms of both politics and trade. This article aims to analyze the methodological shortcomings of traditional models and suggests a new model to evaluate the potential trade benefits of these corridors. The study discusses the reasoning for combining recursive analysis with GIS-network analysis in the logistical planning of international corridors. The authors have used a shopping time model that integrates distance and political risk index (PRI). They have then employed dynamic programming to assess and compare the changing opportunity cost (OPC) of retaining money. The findings suggest that the development of these corridors would provide differing degrees of benefits to different nations, with India being the country that would earn the greatest advantage by joining the IMEEC. Nevertheless, Iran enjoys the most significant benefits in comparison to other members of the INSTC. India stands to benefit somewhat more from its participation in the INSTC compared to the IMEEC.This study offers a pioneering analysis of the economic effects of international trade routes, with a specific emphasis on the India-Middle East-Europe Economic Corridor (IMEEC) and the International North-South Transport Corridor (INSTC). The research proposes a novel approach that combines recursive dynamic programming with network planning. It introduces a new value function that aims to maximise the expected discounted value of future utility for corridor members. This new function considers trade distance and improves upon the traditional model of opportunity cost of holding money. Empirical study provides compelling evidence of the considerable advantages that member nations, namely Iran, Azerbaijan, Russia, and India, experience as a result of the INSTC and IMEEC. Specifically, the INSTC effectively mitigates macroeconomic volatility for Iran, Azerbaijan, and Russia, while the IMEEC offers huge benefits for India. The results emphasise the significance of trade corridors in promoting economic stability, offering policymakers a fresh standard for evaluating the cost-effectiveness and economic advantages of international trade infrastructure investments. Furthermore, the incorporation of a flexible shopping time model emphasises the influence of the duration of transactions on the potential loss of benefits from keeping money, providing a thorough comprehension of how the distance of trade impacts economic well-being. This research has significant implications for international economic policy and infrastructure development. It provides guidance to policymakers on how to optimise trade routes and improve economic stability. Additionally, it paves the way for future research in recursive economic modelling, which aims to develop strong economic policies in a globally interconnected market.