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Simulating the decoupling world under Russia's invasion of Ukraine: an application of IDE-GSM

Author

Listed:
  • Kumagai,Satoru
  • Hayakawa,Kazunobu
  • Isono,Ikumo
  • Gokan,Toshitaka
  • Keola,Souknilanh
  • Tsubota,Kenmei
  • Kubo,Hiroya

Abstract

The world appears to be divided into three blocs: the Chinese–Russian bloc, the Western alliance, and the rest of the world that remains neutral in the conflict between t he former camps. This study estimates the economic impacts of “decoupling” s cenarios on each country and region using a computable general equilibrium (CGE)-t ype simulation model called the geographical simulation model developed by the I nstitute of Developing Economies (IDE-GSM). Simulation results indicate that 1) the decoupling of Russia will not have a significant impact on the global economy, except i n the mining sector, and 2) if China joins the Russian camp, the impact will be s ignificant on the world economy, especially for Asian countries.

Suggested Citation

  • Kumagai,Satoru & Hayakawa,Kazunobu & Isono,Ikumo & Gokan,Toshitaka & Keola,Souknilanh & Tsubota,Kenmei & Kubo,Hiroya, 2023. "Simulating the decoupling world under Russia's invasion of Ukraine: an application of IDE-GSM," IDE Discussion Papers 874, Institute of Developing Economies, Japan External Trade Organization(JETRO).
    • Handle: RePEc:jet:dpaper:dpaper874
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    References listed on IDEAS

    as
    1. Dixit, Avinash K & Stiglitz, Joseph E, 1977. "Monopolistic Competition and Optimum Product Diversity," American Economic Review, American Economic Association, vol. 67(3), pages 297-308, June.
    2. Keith Head & Thierry Mayer, 2000. "Non-Europe: The magnitude and causes of market fragmentation in the EU," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 136(2), pages 284-314, June.
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    Cited by:

    1. Ikumo Isono & Satoru Kumagai, 2023. "ASEAN's Role in the Threat of Global Economic Decoupling: Implications from Geographical Simulation Analysis," Working Papers PB-2022-10, Economic Research Institute for ASEAN and East Asia (ERIA).

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    More about this item

    Keywords

    Decoupling of the world|Simulation analysis|IDE-GSM;

    JEL classification:

    • E27 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Forecasting and Simulation: Models and Applications
    • F17 - International Economics - - Trade - - - Trade Forecasting and Simulation
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)

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