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Journal Articles Environment and Development Economics Year : 2018

Effects of ups and downs of the Mongolian mining sector

Tsolmon Baatarzorig
  • Function : Author
Ragchaasuren Galindev
  • Function : Author
Helene Maisonnave
  • Function : Author
  • PersonId : 1055822

Abstract

The economy of Mongolia, a country rich in natural resources, is increasingly dependent upon the mining sector. International prices of mining commodities have been highly volatile in recent years. This paper uses a computable general equilibrium model to examine the short-term effects on the Mongolian economy of two scenarios: (1) a moderate boom in the coal market; and (2) a drop in the world price of metal ores. It is found that the Dutch disease effect generated by the shocks is insignificant given the structure of the economy (e.g., small export shares and low export intensity of manufacturing and agriculture commodities) and a labor market condition with high unemployment. Since the economy is largely dependent upon on the mining sector, the impacts of the shocks are jarring, implying that the government must abide by its fiscal rules for stable growth and prosperity.

Dates and versions

hal-02314210 , version 1 (24-03-2020)

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Tsolmon Baatarzorig, Ragchaasuren Galindev, Helene Maisonnave. Effects of ups and downs of the Mongolian mining sector. Environment and Development Economics, 2018, 23 (5), pp.527-542. ⟨10.1017/S1355770X18000153⟩. ⟨hal-02314210⟩
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