Catchup growth model
Table of contents
G-Cubed models typically include projections of growth for labor-augmenting technical progress as part of the baseline projections. The growth rates are based on the Barro (1991) catchup growth model. Three sources of information are combined to generate projections of growth rates for each sector in each region:
- the growth rates associated with the technology frontier, the rate at which that frontier progresses from year to year through to the final projection year;
- the technology gaps for each sector in each regions, the percentage behind that technology frontier at the start of the projections; and
- the catchup rates for each sector in each regions, expressed as projections from the first to the last projection year.
This data is made available in the three CSV files described below and it is combined to produce labor-augumenting technical change projections for each sector in each region. Those sectors that are further behind the technology frontier experience faster growth rates as do those sectors with faster catchup rates.
The labor-augumenting technical change projections are stored in the model’s data folder in a file that is typically named labor_augmenting_technical_change.csv. To regenerate this file, re-run the model to create a new solved model. It will only be regenerated if it is missing. This prevents deletion of manual adjustments to the values in that file, in the event that they have been made.
technology_advancement_rates.csv
The CSV file containing the information about the advancement rates for technology in each sector, through all projection years. Values are expressed as a percentage so a value of 2.0 means that the technology will advance by 2% in the associated year. The data is stored with sectors for rows and projection years for columns. The row labels are the SYM sector codes. The columns are the projection years in YYYY format out to the last projection year.
For example, for the 2R model:
| sector | 2018 | … | 2150 |
|---|---|---|---|
| a01 | 1.4 | … | 1.4 |
| a02 | 1.4 | … | 1.4 |
technology_gaps.csv
The CSV file containing the information about the technology gaps in each region for each sector, expressed as a percentage. Thus, a value of 50 means the region has a sector that is 50% as efficient as is possible in the first projection year. The data is stored with sector rows and region columns. The row labels are the SYM sector codes. The column labels are the SYM region codes.
For example, for the 2R model:
| sector | USA | ROW |
|---|---|---|
| a01 | 90 | 100 |
| a02 | 100 | 90 |
Note that the maximum value is 100 and the minimum value must be positive.
It is not mandatory, but it is typical that at least one region is on the technology frontier, with a sector value of 100.
technology_catchup_rates.csv
The CSV file containing the information about the catchup rates for technology in each sector, through all projection years. Values are expressed as a percentage so a value of 2.0 means that the technology gap will close by 2% in the associated year. The data is stored with region in the first column and sector in the second column. The columns are the projection years in YYYY format out to the last projection year.
For example, for the 2R model:
| region | sector | 2018 | … | 2150 |
|---|---|---|---|---|
| USA | a01 | 2 | … | 2 |
| USA | a02 | 2 | … | 2 |
| ROW | a01 | 2 | … | 2 |
| ROW | a02 | 2 | … | 2 |
Note that the maximum value is 100 and the minimum value must be great than -100.
References
Barro, R. J. (1991) Economic Growth in a Cross Section of Countries. The Quarterly Journal of Economics, 106(2), 407–443.