Macro Economic Policy Analysis Applications

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28 Οκτ 2013 (πριν από 3 χρόνια και 7 μήνες)

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Macro Economic Policy
Analysis Applications

Dr. John Shilling

Millennium
Institute

January 28, 2013

You cannot solve the problem with the same
thinking that created the problem

Albert Einstein


Introduction


Millennium Institute is devoted to helping
decision makers achieve sustainable
development


Its Threshold 21 model is an innovative
system dynamics approach to help strategic
decision making


I worked at the World Bank and have been
involved with MI since I retired.


At the Bank, I learned the limitations of
conventional models, which led me to T21

Out of Macro Economic Box


The T21 China model illustrates the
importance of moving outside of the Macro
economic modeling box


It is clear that the economy depends on the
environment and society to function,


So the relations of economic activity with
these areas must be taken into account


This includes addressing externalities, the
commons, and public goods


MI
has many more examples with its
applications of T21 around the world


Moving Beyond the M
-
E Box


The impacts of economic activity on other areas are
well known


pollution, GHG emissions, resource
depletion, etc. but are rarely taken into account in
the conventional models


The positive and negative feedbacks can be quite
important and reverse expected results


It is important to develop a more complete view of
these activities, even as it adds to complexity


Much can be learned by holding discussions of
these relations among experts in different areas.

S D Modeling Gets Out of the Box


It is based on real world causal relations


The T21 model is adapted to individual
countries based on their particular situation


Local data is the basis for the modeling


Valid local sector models can be incorporated


Local experts are involved to describe the critical
causal relations and
visioins

from their sectors,
which expands the scope of the model and
deepens their confidence


Local advisors help define the issues to focus on
and policies to examine in the scenarios


Legend:



(
+
)

Positive link



(
-
)
Negative link

Society

Economy

Environment

Causal Diagram Example

Advantages of T21 Approach


Incorporates cross sector relations based
on real world causal relations


Takes account of long term effects, which
may indicate tipping points and ‘cliffs’


Includes impacts of resource depletion,
climate change, population shifts, etc.


Illustrates and compares the effects of
different sets of policies on all indicators to
bring policymakers together


Examples of Its Application


China on energy, food, population, and
GHG emissions


USA on CAFE Standard


Mali on meeting growth targets


Natural disasters in Jamaica


Food security for IFAD


Green Economy for UNEP


USA: Impact of CAFÉ on GDP


USA: GHG Emissions


Examples of Its Application


China on energy, food, population, and
GHG emissions


USA on CAFE Standard


Mali on meeting growth targets


Food security for IFAD


Green Economy for UNEP


Contributions of T21


Learn about important relations in country


Improve data base


Bring together many interest groups to work
together on cross sector issues


Illustrate results of different policies to reach
decisions about policies for common good


Demonstrate values of policies to public


Provide basis for monitoring and evaluation


Application of T21


Identify partners to work with in country,
establish an advisory council, and gather data


Train team of local experts to use and further
develop the model


Create with local team a fully functional model
and transfer it to the country


Examples of many cases on our website:
www.millennium
-
institute.org



Thank You for Your Attention


Questions and comments are welcome



www.millennium
-
institute.org

Jed.shilling@verizon.net