Efficiency Assessment of Transport Infrastructure Investment within a CGE Framework

This paper describes two different mechanisms based on the process of infrastructure construction to analyze the economic effects of transport infrastructure investment. To examine the effects and the investment efficiency, a single-country, static Computable General Equilibrium (CGE) framework for China is established. Two simulations are carried out by using a China 2002 Social Accounting Matrix (SAM) in the simulation part. Our main conclusion is that the transportation infrastructure investment promotes the economic development dramatically only in the indirect stage; the development of the economy also gives the positive feedback to the further derived demand of transportation investment. It is clear that all these won't happen without the carrier of labor which can spread the economic effects of transportation to different sectors through indirect mechanism and finally promote the long-term development of the wider economy.