Growth diagnostics
The binding constraints on a country's growth, such as finance, infrastructure, skills or institutions, are identified by checking which symptoms each would produce against the evidence.
GCRI · Economic Development
Development economics
Economics and development economics is the science this platform stewards for the network. It explains how economies grow and transform, how resources are allocated, and how shocks and policies affect people's incomes, with attention to distribution and institutions.
01Register
Development economics on the record.
Method recordSTEM method
- MethodEconomics and development economics
- StewardEconomic Development
- Applied inEconomic Development
- Data4 inputs
- Checks3 validation steps
- Canonical pageSTEM Commons
02Application
What economics and development economics does here.
Economics and development economics study how societies produce, distribute and consume resources and how living standards change. They estimate the costs of shocks and the trade-offs among policy responses. In economic development and development finance, economic analysis quantifies indirect losses as shocks spread through supply chains and labour markets. It supports prioritising investment in prevention and recovery. The canonical description is on the STEM Commons.
Structural transformation analysis
Productivity growth is decomposed into gains within sectors and gains from workers moving between sectors, showing how the economy is changing.
Distributional incidence
The effects of price changes, taxes or subsidies are traced to households by income group using survey data on spending and income.
03Simulator
Stocks, flows, delays and a tipping threshold.
Two stocks, pressure and adaptive capacity, joined by a reinforcing growth loop, a delayed balancing response and damage when pressure outruns capacity; past the threshold the system can tip. Teaching model with stated illustrative values, not a prediction.
Controls
- Growth of pressure
- 6.0% a year
- Efficacy of capacity in reducing pressure
- 4.0% a year
- Investment response to perceived pressure
- 20%
- Perception delay
- 4.0 years
- Tipping threshold of pressure
- 60 index
- Amplification past the threshold
- 2.0 times
- Years simulated
- 50 years
Readouts
- Peak pressure
- 113 index
- Capacity at the end
- 186 index
- Years over the threshold
- 15.8 years
Numbers, methods and sources
| Year | Pressure | Capacity | Perceived |
|---|---|---|---|
| 0 | 20.0 | 50.0 | 20.0 |
| 4 | 23.3 | 44.9 | 21.2 |
| 8 | 27.2 | 42.2 | 24.0 |
| 12 | 31.7 | 42.3 | 27.7 |
| 16 | 36.8 | 45.5 | 32.2 |
| 20 | 42.3 | 51.5 | 37.2 |
| 24 | 47.9 | 60.3 | 42.6 |
| 28 | 53.2 | 71.3 | 48.0 |
| 32 | 57.8 | 84.3 | 53.1 |
| 36 | 66.4 | 98.4 | 58.4 |
| 40 | 82.7 | 115.9 | 69.7 |
| 44 | 97.8 | 139.7 | 83.8 |
| 48 | 109.1 | 169.4 | 97.3 |
Methods
- System dynamics Forrester (1961), Industrial Dynamics, MIT Press; Sterman (2000), Business Dynamics
- Critical transitions and tipping points Scheffer and others (2009), Early-warning signals for critical transitions, Nature 461
- Causal loop diagram Sterman (2000), Business Dynamics, McGraw-Hill
- Uncertainty fan (parameter Monte Carlo) Spiegelhalter, Pearson and Short (2011), Visualising uncertainty about the future, Science 333
- One-at-a-time sensitivity (tornado) Saltelli and others (2008), Global Sensitivity Analysis: The Primer, Wiley
Data
No observed data enters this model: it runs on the teaching values set by the controls, to be replaced with a programme's own evidence.
Across the six pillars, led by Nexus Consortium
- Experiments Labs
- Built in Economic Development in Foundry
- Tested at Economic Development in Universe
- Codified in Finance, Insurance and the Economy in Standards
- Published in Economic Development in Reports
- Taught in Faculty of Finance and Economics in Academy
04Data
What the method consumes.
Datasets and records used by economics and development economics on this platform, with the role each plays and the label its values carry. Sources are listed in the source register.
| Data | Role | Label |
|---|---|---|
| National accounts | Output and structure | Published statistics |
| Labour force surveys | Employment | Published statistics |
| Household budget surveys | Distribution | ESTIMATED |
| Firm surveys | Constraints | REPORTED |
05Methods and evidence
How development economics is modelled, measured and tested.
The model, its assumptions, its data and its uncertainty, in the form a scientist or engineer would check. Structures follow published methods. The values drawn are illustrative, not findings.
Sensitivity analysis
Which inputs move the result for development economics most, one at a time across their stated ranges.
FAIR guiding principles · GO FAIR and FORCE11W3C PROV · World Wide Web ConsortiumGuidance on consistent treatment of uncertainties · IPCCCEOS Analysis Ready Data · Committee on Earth Observation Satellites
06Validation
How results are checked.
Models are assessed against historical episodes and out-of-sample data. Parameter estimates are compared across studies and identification strategies.
| Check | How it is done |
|---|---|
| Data revision checks | Analyses note revisions and rebasing of national accounts |
| Alternative explanations | Diagnoses consider competing explanations for observed symptoms |
| Distributional robustness | Incidence results are tested with alternative survey years |
Equilibrium models may understate disruption and nonlinear cascades. Informal economies and non-market losses are poorly measured.
08Stewardship
Who maintains the method.
Economic Development stewards economics and development economics for the Consortium and reviews how it is applied across platforms.
09Questions
Questions and answers.
What are the limits of economics and development economics in this field?
Equilibrium models may understate disruption and nonlinear cascades. Informal economies and non-market losses are poorly measured.
How are results checked?
Models are assessed against historical episodes and out-of-sample data. Parameter estimates are compared across studies and identification strategies.
Are the values on this page real?
The data names, roles and checks are real descriptions of practice. The canvas shows a design of the method's use, not a run; no result is reported here.
Where else is this method applied?
The canonical method page lists every platform that applies it.
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