Economic Model
- Represents the economy in six sectors: agriculture, materials, energy, industry, services, and ICT (other sectors could be configured, using raw data from the GTAP project)
- Computes and uses input-output matrices that change dynamically with development level
- Is a general equilibrium-seeking model that does not assume exact equilibrium will exist in any given year; rather it uses inventories as buffer stocks and to provide price signals so that the model chases equilibrium over time
- Contains a Cobb-Douglas production function that (following insights of Solow and Romer) endogenously represents contributions to growth in multifactor productivity from R&D, education, worker health, economic policies ("freedom"), and energy prices (the "quality" of capital)
- Uses a Linear Expenditure System to represent changing consumption patterns
- Utilizes a "pooled" rather than the bilateral trade approach for international trade
- Has been imbedded in a social accounting matrix (SAM) envelope that ties economic production and consumption to intra-actor financial flows