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Unlocking Bhutan’s Potential: Measuring Potential Output for the Small, Landlocked Himalayan Kingdom of Bhutan

dc.contributor.authorSabyasachi Mitra
dc.contributor.authorSarah Carrington
dc.contributor.authorAnthony Baluga
dc.description.abstract"Bhutan’s rapid economic growth in the past 2 decades has been driven principally by large-scale, lumpy investments in the all-dominant hydropower sector. While growth rates have averaged 7.9% since 1981, they have also been quite volatile, making the economy very vulnerable to cyclical swings and external shocks. A key challenge for Bhutan is to channel the income generated by the hydropower sector for sustainable and inclusive growth. This has been particularly challenging when the majority of the population is employed in the low productivity and largely subsistence agricultural sector. This paper develops a macroeconomic model of Bhutan’s potential output and analyzes the impact of several policy options on potential growth for Bhutan over 2013–2030. The results show that while hydropower development will underpin future growth, higher investment in education, health, and efforts to diversify its economic base through promotion of tourism and other niche sectors can yield a much higher potential output. "
dc.publisherAsian Development Bank
dc.rightsCC BY 3.0 IGO
dc.titleUnlocking Bhutan’s Potential: Measuring Potential Output for the Small, Landlocked Himalayan Kingdom of Bhutan
dc.typeWorking Papers
dc.subject.expertMacroeconomic Analysis
dc.subject.expertPerformance Evaluation
dc.subject.expertImpact Evaluation
dc.subject.adbEconomic indicators
dc.subject.adbGrowth models
dc.subject.adbGross domestic product
dc.subject.adbEconomic forecast
dc.subject.naturalEconomic development projects
dc.subject.naturalEconomic policy
dc.subject.naturalEconomic forecasting
dc.title.volumeno 32
dc.contributor.imprintAsian Development Bank
oar.adminregionAsia and the Pacific Region
oar.authorMitra, Sabyasachi
oar.authorCarrington, Sarah
oar.authorBaluga, Anthony

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  • ADB South Asia Working Paper Series
    The South Asia Working Paper Series of the Asian Development Bank (ADB) is a forum for ongoing and recently completed research and policy studies undertaken in ADB or on its behalf. The series is a knowledge product that replaces the South Asia Economic Report and South Asia Occasional Paper Series. It is meant to enhance greater understanding of current important economic and development issues in South Asia, promote policy dialogue among stakeholders, and facilitate reforms and development management. The ADB south Asia Working Paper Series, maintained by the South Asia Department of ADB, is a quick-disseminating, informal publication whose titles could subsequently be revised for publication as articles in professional journals or chapters in books.

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