A recursive networking economic analysis of international economic corridors: IMEEC and INSTC

Abstract

The expansion of the International North-South Transport Corridor (INSTC) and the introduction of the India-Middle East-Europe Economic Corridor (IMEEC) are of great significance in terms of both politics and trade. This article aims to analyze the methodological shortcomings of traditional models and suggests a new model to evaluate the potential trade benefits of these corridors. The study discusses the reasoning for combining recursive analysis with GIS-network analysis in the logistical planning of international corridors. The authors have used a shopping time model that integrates distance and political risk index (PRI). They have then employed dynamic programming to assess and compare the changing opportunity cost (OPC) of retaining money. The findings suggest that the development of these corridors would provide differing degrees of benefits to different nations, with India being the country that would earn the greatest advantage by joining the IMEEC. Nevertheless, Iran enjoys the most significant benefits in comparison to other members of the INSTC. India stands to benefit somewhat more from its participation in the INSTC compared to the IMEEC.

Impact Statement

This study offers a pioneering analysis of the economic effects of international trade routes, with a specific emphasis on the India-Middle East-Europe Economic Corridor (IMEEC) and the International North-South Transport Corridor (INSTC). The research proposes a novel approach that combines recursive dynamic programming with network planning. It introduces a new value function that aims to maximise the expected discounted value of future utility for corridor members. This new function considers trade distance and improves upon the traditional model of opportunity cost of holding money. Empirical study provides compelling evidence of the considerable advantages that member nations, namely Iran, Azerbaijan, Russia, and India, experience as a result of the INSTC and IMEEC. Specifically, the INSTC effectively mitigates macroeconomic volatility for Iran, Azerbaijan, and Russia, while the IMEEC offers huge benefits for India. The results emphasise the significance of trade corridors in promoting economic stability, offering policymakers a fresh standard for evaluating the cost-effectiveness and economic advantages of international trade infrastructure investments. Furthermore, the incorporation of a flexible shopping time model emphasises the influence of the duration of transactions on the potential loss of benefits from keeping money, providing a thorough comprehension of how the distance of trade impacts economic well-being. This research has significant implications for international economic policy and infrastructure development. It provides guidance to policymakers on how to optimise trade routes and improve economic stability. Additionally, it paves the way for future research in recursive economic modelling, which aims to develop strong economic policies in a globally interconnected market.

Keywords:

• Recursive
• networking
• shopping time
• economic corridors
• INSTC
• IMEEC

JEL:

• C61, E43, R42

Reviewing editor:

• Goodness Aye, University of Agriculture, Makurdi Benue State, Nigeria

Subjects:

• Econometrics
• Development Economics
• Political Economy

Author contributions

Iman Bastanifar: Conceptualization, Methodology, Data curation, Investigation, Validation Formal analysis, Writing – original draft, Writing – review & editing.

Ali Omidi: Formal analysis, Investigation, Resources, Writing – original draft

Kashif Hasan Khan: Formal analysis, Investigation, Resources, writing – original draft, Writing – review & editing, Visualization, Supervision, Project administration.

Disclosure statement

There is no any conflict of Interest between authors.

Data availability statement

Data for the study are obtained from publicly available sources and can also be made available upon request.

Notes

1 The Bellman equation is a requisite condition in mathematical optimisation, named after Richard Bellman’s contribution to the development of a novel method for solving dynamic programming (Avanish, 1990). This strategy is commonly employed in recursive models in both macroeconomics and monetary economics. Several instances of economic modelling employing recursive techniques may be found in the research conducted by Stokey et al. (1989). To gain further insights into the application of Bellman’s equation in optimising shopping time, readers are encouraged to refer to Iman’s publications from 2023 to 2024.

Additional information

Funding

This study has not been funded by any organization or individual.

Notes on contributors

Iman Bastanifar

Dr. Kashif Hasan Khan is an Associate Professor at the department of Economics, Ala-Too International University, Bishkek, Kyrgyzstan. Previously, Kashif worked in Konya, Turkey, as an Assistant professor, an International Business Consultant in the Philippines, and a consultant economist with the Asian Development Bank. His latest and forthcoming works include Emerging Central Asia: Managing Great Powers Relations (2021), Europe-Central Asia Relations New Connectivity Frameworks (2023), India’s Economic Corridor Initiatives: INSTC and Chabahar Port (2024), and Strategic Navigation through Economic Corridors – Intersecting Geoeconomics and Geopolitics (2025).He has multiple research papers in scholarly journals that are indexed in the Web of Science, Scopus, ABDC, and other databases

Ali Omidi

Dr. Iman Bastanifar holds the position of Associate Professor at the department of Economics at the Faculty of Administrative Sciences and Economics at Isfahan University, Isfahan, Iran. His area of expertise lies in the fields of international and monetary macroeconomics. Iman has conducted thorough research on economic corridors and has published multiple research papers, including a recent one titled “Integrating gravity models and network analysis in logistical strategic planning: a case study of the India Middle-East Europe Economic Corridor (IMEC).”

Kashif Hasan Khan

Dr. Ali Omidi is an associate professor of International Relations at the Dept. of Political Science, University of Isfahan, Isfahan, Iran. He published dozens of articles, books, and analyses on Iranian foreign policy, International Relations, and geopolitical issues. He was awarded a prestigious fellowship from SIPRI in Stockholm and UNITAR in the Hague. He took part in many international conferences and events. He teaches and does research on Middle East Politics, Iranian Foreign Policy, Eurasia politics, Comparative Foreign Policy, and International Law with a focus on self-determination cases. He often has been interviewed and inquired about Iranian foreign policy by local, national, and international media.