Reference
Every lever, and what it acts through
A lever is one thing you change about the world. Each one enters a named equation, moves through the trade network, the price system and the labour market, and comes out the other side as an effect on countries nobody mentioned. There are 44 of them.
Nothing here is free
Anything that costs money is paid for out of the primary balance, which means it shows up in the debt path as well as in the thing it was meant to do. Schooling raises potential output over twenty years and raises debt from the first one. A reactor generates in nine years and is on the books from today. The model does not let a policy be a pure benefit, because policies are not.
Every lever takes a size, a start year and a duration. A scenario is any number of them at once.
The full list
Trade
4Import tariffpercentage points · one country on anotherApplied by the source on imports from the target. Set the target to everyone for a blanket tariff, or pick a coalition so the whole bloc acts together.
Export controlpercent of flow restricted · one country on anotherThe classic supply shock. Restricting semiconductors or compute bites hardest because there is no near term substitute.
Sanctions packageintensity 0 to 100 · one country on anotherPick a coalition to have every member impose it together, which is what actually moves an economy.
Trade agreementpercent deeper integration · one country on anotherThe other direction. Deepens trade between the two sides and phases out tariffs already in place.
Resources
8Oil and gas productionpercent change · one countryActs through: World energy price, import bills, inflation, energy intensive output
Energy capacity investmentpercent of GDP a year · one countryActs through: Domestic energy supply with a build lag, capital stock, import dependence
Food and minerals supplypercent change in supply · everywhere at onceActs through: Food price index, headline inflation, unrest in low income importers
Carbon pricedollars a tonne · one countrySet it worldwide from the global scope, or on one country to see what carbon leakage does to it.
Water stressindex points · one countryActs through: Crop yields, food imports, food price passthrough, emigration pressure
Warming pathextra degrees C by the horizon · everywhere at onceActs through: Crop yields, water stress, disaster frequency, migration pressure, labour productivity in hot regions
Desalination and water worksindex points of relief · one countryWater stress is what turns a dry year into a food problem and a food problem into a migration problem. This is the only lever on the list that acts on it directly, and it is expensive.
Agricultural policypercent shift toward self sufficiency · one countryChanging what a country grows takes seasons, so it arrives as a share of the gap between where it is and feeding itself, not as an instant.
Government
6Debt restructuringpercent haircut · one countrySet the duration to one year unless you mean to restructure every year, which no one survives.
Fiscal impulsepercent of GDP a year · one countryActs through: Demand, debt path, risk premium, inflation
Corporate tax ratepercent · one countryActs through: Investment, profit shifting, revenue, capital stock
Strategic sector subsidypercent of GDP a year · one countryActs through: Domestic capacity in that good with a build lag, fiscal balance
Military spendingpercent of GDP · one countryActs through: Fiscal balance, industrial demand, regional tension, crowding out of other investment
Development transferpercent of output a year · one countryModelled only on the side that pays for it. The model has no transfer mechanism between two countries’ balance sheets, so a transfer in is not credited to the receiver, and the panel says so rather than quietly implying it.
Money
8Policy rate shiftpercentage points off the rule · one countryActs through: Investment, consumption, currency, debt service, capital flows
Inflation targetpercent · one countryActs through: Expectations anchor, the rule the central bank reacts to
Currency devaluationpercent · one countryActs through: Import prices, export competitiveness, foreign currency debt burden
Capital controlsintensity 0 to 100 · one countryActs through: Investment, currency, risk premium, foreign capital stock
Bank capital requirementpoints of extra capital · one countryIt does not stop a shock. It stops a shock becoming a banking crisis, which shows up as a slightly lower premium in the good years and a much smaller tail in the bad ones.
Price controlspercent of the increase suppressed · one countryIt moves the number now and pays for it later as a shortage rather than as a price. The rebate here is deliberately partial: the rest reappears in the gap, which is what actually happens.
World interest ratespercentage points · everywhere at onceA coordinated shift, which is a different object from one country moving its own rate: there is no relative advantage, only the level.
Financial stressindex, 0 to 100 · everywhere at onceThe thing that turns one country’s problem into everybody’s. It raises every sovereign premium at once and makes a global downturn more likely.
People
2Migration intakepercent change in net intake · one countryActs through: Labour force, potential output, wage pressure, age structure, political stability
Fertility policypercent change in births · one countryActs through: Population and age structure with a twenty year lag to the labour force
Technology
6AI capability stepindex points a year · everywhere at onceActs through: Total factor productivity, task displacement in exposed sectors, compute and energy demand
Automation costpercent change · everywhere at onceActs through: Manufacturing labour intensity, reshoring, wage share, unemployment in exposed work
Fab capacitypercent change · one countryActs through: World chip supply with a four year build lag, chip price, manufacturing constraint
Productivity growth shiftpercentage points a year · one countryActs through: Potential output, real wages, inflation, fiscal room
Input stockpilemonths of cover · one countryA stockpile does not create supply, it buys time. Against a shortage that ends it is decisive and against one that does not it is a delay, and the model treats it as exactly that.
Capability regulationpercent of the step slowed · everywhere at onceRegulation does not remove capability, it slows how fast it is put to work. So it scales the step rather than the stock, which means the gap it opens closes again once it is lifted.
Geopolitics
2Armed conflictintensity 0 to 100 · one country on anotherActs through: Output loss, displacement, energy and food prices, shipping, military spending everywhere nearby
Pandemicseverity 0 to 100 · everywhere at onceActs through: Labour supply, contact intensive services, supply chains, fiscal response
Public capital
2Infrastructure investmentpercent of output a year · one countryRoads, power, water and rail. It raises what the economy can make while it is being built and keeps a smaller share of that afterwards, and it makes every imported thing a little cheaper to land.
Ports and logisticspercent capacity added, negative for capacity lost · one countryThe least glamorous trade policy there is and one of the most reliable: a discount on everything that arrives, without asking anybody else’s permission.
Human capital
3Education spendingpercent of output a year · one countryThe slowest lever on the list. It builds a stock rather than buying a flow, and the stock is what raises potential output, so the payoff arrives over decades and then does not stop.
Research spendingpercent of output a year · one countryFaster than schooling and slower than anything else. It also raises how much of the world’s capability a country can actually take up, which matters more than the research itself in most places.
Retirement ageyears of change · one countryRaising it puts people back into the labour force, which raises measured unemployment before it raises output. That order is the political problem with it, and the model reproduces it.
Energy
3Nuclear generation buildgigawatts ordered · one countryOrdered today, generating in about nine years. That lag is the single most important fact about it as a policy lever and the reason it never answers a crisis, only the decade after one.
Strategic reserve releasepercent of production added · one countryStock, not production. It adds supply while it runs and nothing at all afterwards, which is the whole difference between a reserve and a field, and the reason the price comes back.
Storage cost fallpercent cheaper · everywhere at onceStorage is what turns intermittent capacity into dependable capacity, so it raises what the same build rate is worth rather than adding capacity of its own, and it makes demand answer price faster.
Or just write a sentence
The box reads ordinary words into these, weighs the ways it could go and runs every one of them.
Open the simulator