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Analysis of economic potentials of infrastructure developments in and around Bhutan

Author

Listed:
  • Kumagai, Satoru
  • Isono, Ikumo
  • Tsubota, Kenmei

Abstract

This paper conducts a simulation analysis of a spatial economic model in Southern Asia, with a particular focus on Bhutan. It indicates the potential impacts of different infrastructure investments on regional economies in Bhutan and the neighboring countries. The results reveal that road infrastructure investments within Bhutan will likely increase regional accessibility, reshape the monocentric structure of the economy, and induce migration, thereby increasing the real wage for most of Bhutan’s regions. Furthermore, road infrastructure investments within India have some 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.

Suggested Citation

  • Kumagai, Satoru & Isono, Ikumo & Tsubota, Kenmei, 2018. "Analysis of economic potentials of infrastructure developments in and around Bhutan," IDE Discussion Papers 702, Institute of Developing Economies, Japan External Trade Organization(JETRO).
    • Handle: RePEc:jet:dpaper:dpaper702
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    More about this item

    Keywords

    Bhutan; Simulation; New economic geography; Economic geography;
    All these keywords.

    JEL classification:

    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
    • R13 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General Equilibrium and Welfare Economic Analysis of Regional Economies
    • R42 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Government and Private Investment Analysis; Road Maintenance; Transportation Planning

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