A boom in the Mongolian mining sector has meant significant growth for the country, but this concentrated success has also led to increased economic dependence on mining. The international price of metal ores is highly volatile and an economy dependent on mining is therefore vulnerable. A team of local researchers builds and uses a static CGE model of the Mongolian Economy, with data from various national surveys, to assess the economy’s vulnerability. The researchers find that rapid expansion in the coal sector may have many positive effects including increased GDP, exports and employment. On the other hand, they also find that a drop in the world price of metal ore may have various negative effects in the short run, including reduced employment and a decrease in GDP. Based on these results, the team makes several recommendations for policy to protect against vulnerabilities. Find out more about the research methods, findings and policy recommendations in the following PEP publications:
