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2023 ZIBS Forum, on the theme of "Innovating for the Future: The Frontier in Business Excellence", was successfully held on January 13. The forum focused on topics such as data intelligence, environmental science, financial technology, digital innovation, and corporate restructuring. It shared the latest research findings, innovative discoveries, and practical experiences related to cutting-edge business developments, providing insightful perspectives and strategies for the sustainable development of the global business, technology, and education sectors.
In the Young Scholars Forum, ZIBS Assistant Assistant Professor WEI Binru delivered a keynote speech on "Infrastructure and Economic Growth- Agent Based Modeling Approach", in which she utilized agent modeling to explore the impact of infrastructure on economic growth.
Economics seeks to achieve as much growth as possible before going to a downturn. Therefore, the research tries to find what boosts economic growth and how academics can formulate policy recommendations. The following is a summary of her speech.
Based on the advantage of agent-based modeling in analyzing complex systems, WEI Binru wants to delve into the impact of infrastructure on economic growth using a micro-based approach. By simulating different infrastructure investment strategies, she tries to reveal potential mechanisms through which infrastructure promotes productivity, employment, and trade and to offer theoretical foundations for policymakers to optimize infrastructure investment for achieving sustainable economic growth.
The Chinese economy is propelled by several key driving forces, including export, consumption, and investment. In response to the 2008 global financial crisis, the Chinese government made a strategic decision to inject trillions of RMB into constructing an extensive High-Speed Railway (HSR) network. This significant investment naturally raises questions about its worthiness and the ways in which we can interpret its outcomes.
To address these questions, a wide range of literature has been dedicated to examining the impact of the HSR network. Some of this research points to the positive effects of HSR, such as its role in increasing employment opportunities and promoting tourism. However, there is also literature that highlights the potential negative effects of the HSR network. One of the main concerns is that it may contribute to increasing regional development imbalances.
The extensive HSR network provides valuable lessons for studying the impact of HSR from different perspectives, favoring the development of the Belt and Road Initiative. Therefore, WEI Binru brought up several questions. If HSR has uneven impacts on regional economic development, how can we classify and quantify them? What factors contribute to benefiting from HSR development? What factors lead to the siphoning effect after HSR development? What policy recommendations can we generate for further development?
Focusing on these research questions, WEI Binru started demonstrating her research framework. HSR development will bring accessibility changes at different levels. Accessibility changes can trigger a new matching process for elements and resources between cities and districts. This pulling and pushing force between different places will reshape our city structure. The evolution of city interactions will change city development in various aspects. For example, thanks to the HSR network, people can now choose to live in the suburbs or adjacent cities instead of metropolitan areas for a better living space and environment while still benefiting from job opportunities in big cities.
One contribution of WEI Binru's research is the application of agent-based modeling. An agent-based model is a kind of computational model that is highly effective in exploring and explaining complex systems, which consist of multiple interacting agents who are situated spatially and evolve over time. Agent-based modeling dispenses from the classical optimization and equilibrium assumptions and allows for more complex interactions between agents; such approaches are worthy of our attention.
In the last part, WEI Binru presented her findings. If we analyze the statistical results proportionally, then on average, there are significant percentage increases in agents' average utility, the mean of the firm's wealth, the mean of the price index, and the mean of the GDP index. The results of the sensitivity and robust check are: agents' average utility values are sensitive to exogenous parameter values (EPV); the GDP index is less sensitive to EPV; and firms' profits remain volatile.
*This article is based on the speech made by ZIBS Assistant Professor WEI Binru at ZIBS 2023 Forum. The views and opinions expressed in this article are those of the speaker and do not necessarily reflect the views or positions of ZIBS.
WEI Binru
Assistant Professor
Dr. WEI Binru, who graduated from the University of Cambridge, is currently an assistant professor at ZIBS. Before joining ZIBS, she held a teaching position at Lancaster University Business School. Her research interests cover macroeconomics, spatial economy, and carbon economy. She focuses on various specific research topics, including evaluating the impact of infrastructure on urban economic development, studying the green energy industry and green economy, and conducting quantitative analysis of carbon economy policies. Dr. WEI utilizes research methods such as machine learning, mathematical analysis, and agent-based economic modelling.
