Financial Contagion System Dynamics Modeling: The Case of Mongolia, 2024–2050
https://doi.org/10.47703/2789-8253-2026-3-26-51
Abstract
Mongolia’s high dependence on mineral exports, external financing, and China’s economic environment increases the vulnerability of the national financial system to cross-border external shocks. The aim of the study is to develop and calibrate a model of the systemic dynamics of Mongolia’s financial contagion, enabling assessment of the transmission channels of external financial shocks, the consequences of major infrastructure projects, and the long-term dynamics of financial and macroeconomic indicators in 2024-2050. The research methodology includes system-dynamic modeling, scenario analysis, sensitivity analysis, and Monte Carlo simulation. The initial information base consists of official data from the National Statistical Office of Mongolia, the Bank of Mongolia, the Mongolian Stock Exchange, and the Ministry of Finance for 2010-2024. The basic scenario, three scenarios for the implementation of individual megaprojects, the scenario of their simultaneous implementation and the scenario of repeated external shocks are considered; uncertainty is estimated based on 500 Monte Carlo iterations. The results show that in the baseline scenario, the real gross domestic product increases from 60.0 trillion tugriks in 2024 to 108.9 trillion tugriks in 2050, or 1.8 times. External shocks lead to a decrease in the stock index of 10-15% and foreign direct investment by 4-5 billion US dollars, but their long-term impact is mostly offset over ten years. The results obtained confirm the expediency of the phased implementation of megaprojects and the strengthening of the stabilization mechanisms of Mongolia’s financial policy.
About the Authors
A. Khurelbaatar
Business School, National University of Mongolia
Mongolia
Mongolia
Ankhbileg Khurelbaatar – PhD Candidate
Ulaanbaatar
A. Chuluunbaatar
Business School, National University of Mongolia
Mongolia
Mongolia
Ankhbayar Chuluunbaatar – PhD, Associate Professor
Ulaanbaatar
B. Namsrai
Business School, National University of Mongolia
Mongolia
Mongolia
Batnasan Namsrai – PhD, Professor, Dean of Business School
Ulaanbaatar
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For citations:
Khurelbaatar A., Chuluunbaatar A., Namsrai B. Financial Contagion System Dynamics Modeling: The Case of Mongolia, 2024–2050. Eurasian Journal of Economic and Business Studies. 2026;70(3):26-51. https://doi.org/10.47703/2789-8253-2026-3-26-51
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