Georgia : Assessing Economy Wide Indirect Impacts of East-West Highway Investments through CGE Modeling
The objective of this study was to assess the economy wide indirect benefits of investments in the East West highway (EWH). This study has used a computable general equilibrium (CGE) model, which simulates indirect benefits associated with the comp...
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| Language: | English en_US |
| Published: |
Washington, DC
2015
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| Online Access: | http://documents.worldbank.org/curated/en/2015/09/25092360/georgia-assessing-economy-wide-indirect-impacts-east-west-highway-investments-through-cge-modeling http://hdl.handle.net/10986/22753 |
| Summary: | The objective of this study was to
assess the economy wide indirect benefits of investments in
the East West highway (EWH). This study has used a
computable general equilibrium (CGE) model, which simulates
indirect benefits associated with the completion of the
upgraded road corridor. The transmission channel modeled is
the reduction in transportation costs - reduction in vehicle
operating costs, and time savings - resulting from the
investments in the EWH. A CGE model is a simultaneous
equation system that consists of equations representing
various economic relationships for different economic
agents, such as producers and households. CGE models are
commonly used by countries and international financial
institutions to simulate policy interventions to determine
economy-wide impacts. This study involved modifying the
existing social accounting matrix (SAM) and CGE model in
order to carry out simulations to answer the question of
economy wide impacts of the EWH investments, including
impacts on real gross domestic product (GDP) growth, jobs,
and trade, as well as impacts on households disaggregated by
income. It aims to answer the following questions: how will
the EWH lower the transportation costs for producers of
goods and services?; what are the economy wide impacts of
the EWH on employment, real GDP growth, trade, and household
income?; and can the EWH help bridge the existing economic
divide between rural and urban areas in Georgia? The study
is aims to simulate quantitatively how the EWH as a
large-scale infrastructure investment program can bring
significant stimulus to foster economic growth and welfare
in Georgia. |
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