An Empirical Study on the Economic Effect of Financial Cooperation among Countries of the "Silk Road Economic Belt"
Financial cooperation has been popular among different countries since the new century. Recently, the "Silk Road Economic Belt" has attracted the attention of the world. This research focuses on the economic impacts of financial cooperation between different countries along this belt, arguing that the adoption of local currency settlement system is at the initial stage of regional financial cooperation. This research innovatively measures international trade volume, GDP, and welfare among Silk Road and other major countries as a result of financial cooperation through the application of the GTAP model. The results show that, if the local currency settlement system becomes the main model of regional financial cooperation, the appreciation of local currency, e.g. RMB, can increase the GDP in Central Asia, the European countries, and North Africa and optimize the international trade structure in China at the same time. However, the export and import volumes of most industries of the United States, Japan and Australia which do not belong to the Silk Road will suffer from slight declines due to the change of international trade, while their national welfares will increase slightly at the same time. The results have significant implication for relevant researchers, organizations, and government policy makers. DOI: http://dx.doi.org/10.5755/j01.ee.28.5.19189
