A Global Economics Model

Klein, L.R. (1979). A Global Economics Model. IIASA Working Paper. IIASA, Laxenburg, Austria: WP-79-076

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Abstract

There are appropriate occasions for large detailed models and for small simple models. In the context of the analysis of the world economy over long stretches of time, a good case can be made for the building of a small model -- one that captures the essence of some aspect of growth and general economic environment that can serve a wide variety of problems. Many of these problems are going to be handled by scholars who are not economists -- therefore, it is advantageous to construct a model that is not data-intensive, that is easy to manage, and easy to apply to a limited range of issues.

It is in response to the need for a model that meets such constraints that I have put together the simple system in this paper. There is much to be said in favor of learning to walk before learning to run. It is in this spirit that the present system is tentatively put forward.

The present study is only a first attempt. Many of the data and specifications need further work in a number of directions. It is hoped that it will generate discussion and provide a framework for moving to larger scale global systems that capture more of the detailed inter-relationships of the world economy. It is also hoped that the discussion can lead to suggestions for better data compilation and processing.

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