World Bank2015-10-082015-10-082015-08https://hdl.handle.net/10986/22753The 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.en-USCC BY 3.0 IGOVEHICLE OPERATING COSTSTRANSPORT SECTORIMPERFECT SUBSTITUTESTRANSPORTATION ACCOUNTSPRODUCTIONPRICE DISTORTIONSTRANSPORT COST SAVINGSPASSENGERSCIRCULAR FLOWSTOCKDISPOSABLE INCOMEINCOMEEXPECTATIONSTRANSPORT INFRASTRUCTUREVEHICLESTRANSPORTATION COSTSREAL GDPTRANSPORTATION RESEARCHEXPORTSELASTICITYINFRASTRUCTURE DEVELOPMENTECONOMETRIC MODELINGHIGHWAY PROJECTSWELFAREOPTIMIZATIONTRAVEL SPEEDEQUILIBRIUMVARIABLESTRAFFICTAXINPUTSREAL INCOMEINCOME TAXGROSS VEHICLE WEIGHTRETURNS TO SCALEAIRTRANSPORT SERVICESTRANSPORTATION INFRASTRUCTUREECONOMIC OUTLOOKHIGHWAY INVESTMENTSSPEEDSTRAVEL COSTSVEHICLETRANSPORT INVESTMENTSSAVINGSROADTECHNICAL ASSISTANCEFEASIBILITY STUDIESCOSTSTELECOMMUNICATIONSROAD NETWORKTRANSPORTEXOGENOUS VARIABLESIMPACT OF TRANSPORTCONSTANT RETURNS TO SCALEMOBILITYBASE YEARDEMAND FOR TRANSPORTINTERNATIONAL TRANSPORTLONGER DISTANCESTRIPSWTOMODES OF TRANSPORTDOMESTIC TRANSPORTTRUEOPEN ECONOMYHIGHWAY IMPROVEMENTINCOME LEVELSVEHICLE-KILOMETERSROAD IMPROVEMENTELASTICITY OF SUBSTITUTIONHIGHWAY IMPROVEMENT PROJECTGROSS DOMESTIC PRODUCTROUTESUBSIDIESGRANTSINFRASTRUCTURETAXESINFRASTRUCTURE INVESTMENTEQUILIBRIUM ANALYSISDEMAND FOR TRANSPORT SERVICESUNEMPLOYMENTBUSCONSUMPTIONDRIVINGVALUE ADDEDTRAVELTRANSPORTATIONTRANSITCAPITALWAGESPOLICIESCOSTS OF TRANSPORTATIONTRUCKSVEHICLE FLEETCARSVALUECOMPETITIVENESSPRODUCTION FUNCTIONSELASTICITIESDEMANDPRICE CHANGESEXCISE TAXEXCESS DEMANDECONOMYCONSUMERSMOTOR VEHICLESPASSENGER TRAVELCORRIDOR INVESTMENTROAD PROJECTSBENCHMARKRAILWAYECONOMIC MODELSPRODUCTION FUNCTIONBRIDGETAX REVENUEROAD USERROADSCOST OF TRANSPORTATIONCARPARTIAL EQUILIBRIUM ANALYSISHIGHWAYTRADEAIR TRANSPORTGDPVEHICLE COSTGOODSTHEORYCOST OF TRANSPORTGENERAL EQUILIBRIUM ANALYSISGROWTH RATETRANSPORTATION COSTINVESTMENTVEHICLE OPERATING COSTTRANSIT CORRIDORECONOMIC INFORMATIONSUPPLYFUELPRODUCT MARKETSLANESINVESTMENTSCOST-BENEFIT ANALYSISTOTAL OUTPUTEXCESS SUPPLYTRANSPORT COSTSBUS PASSENGERSVEHICLE OPERATINGTRAVEL TIMECONSUMPTION INCREASESTRANSPORTATION SERVICESTRANSPORT POLICIESPASSENGER-TRIPSVEHICLE OCCUPANCYFUEL COSTFREIGHTPRICESBENEFITSReportWorld Bank10.1596/22753