Title page

Contents

Abstract 2

1. Introduction 3

2. Overview of the Belt and Road Initiative 4

3. Related Economics Literature 7

3.1. Estimates of the Effects on Trade Costs 7

3.2. Estimates of the Effects on Trade Flows 8

3.3. Estimates of the Effects on Cross-Border Investment 9

3.4. Estimates of the Effects on GDP Growth 9

3.5. Estimates of the Effects on Economic Welfare 10

3.6. Literature that Tracks the BRI Countries 11

4. Economic Model of the Effects of BRI on Growth 11

5. Economic Model of the Effects of BRI on Trade Costs 15

6. Gravity Model Simulations 20

6.1. Counterfactual Trade Flows 21

6.2. Impact on Total Trade of the Countries 22

6.3. Impact on Bilateral Trade Flows 23

7. Conclusions 24

References 26

Appendix A 31

Appendix B 32

Table 1. Econometric Estimates from GDP Growth Model 13

Table 2. Estimated Effect on GDP in Central Asian Countries 15

Table 3. Econometric Estimates on Trade Costs 17

Table 4. Econometric Estimates on Trade Costs 18

Table 5. Estimated Change in Average Trade Costs of Central Asian Countries 20

Table 6. Change in the Multilateral Trade of Each Country 22

Table 7. Estimated Change in Bilateral Trade Flows 23

Table 8. Additional Estimates of Changes in Bilateral Trade Flows 31

Figure 1. BRI Investment and Construction Projects, in Billion Dollars 7

Figure 2. Histogram of Increases in GDP of BRI Countries 14

Figure 3. Histogram of Changes in the Trade Costs of BRI Countries 19