See Chapter 1 "The Standard LTGM" in the ebook "

The Long Term Growth Model: Fundamentals, Extensions, and Applications

and "Model Description" on the LTGM websote for a list of model equations, and an explanation of the drivers of growth in the LTGM.

if using Excel 2010 or later all features work as planned

if using earlier versions of Excel, dropdown menus are not supported; but there is an easy fix - see instruction (7) below

There are no macros in this spreadsheet

Release notes for new/changed features:

New in v4 - poverty extension. Now users can see the implications of growth fundamentals for poverty rates. See Model description Section 5 for a description

New in v5.3: all variables run to 2100, based on newly available UN population projections to 2100

New in v5.4: addition of IMF WEO forecasts (Inv, GDP), updated poverty lines, IMF inv & cap stock dataset for K/Y

New in v5.5: new optional climate damages module (bottom of InputDataA/InputdataB to be linked to external sheet/datasource). Automated constant age-cohort specific labor force participation rates. Automatic calculation of future income group (WB definition LI/LMI/UMI/HI).

New in v5.6: High and low fertility population projection options added.

1) General Instructions

Worksheet "InputDataA_GeneralAssumptions" controls most simulation parameters and assumptions that affect all three models

Choose your country from the drop down menu at the top left of "InputDataA_GeneralAssumptions" (select the cell first).

Data from that country will automatically be populated, but you can specify most of the parameters yourself if you choose (see Worksheet "GraphsA" figures of general assumptions).

Worksheet "InputDataB_ModelSpecAssumptions" controls model-specific parameters

If you want to calculate growth for a given investment-to-GDP profile, use Model 1

If you want to calculate required investment to achieve a target growth path, use Model 2

If you want to calculate growth for a given savings-to-GDP profile, use Model 3

(This this last case also requires some assumption on external balance, described below)

See Worksheet "GrapshB" for graphs of model-specific inputs and outputs

Yellow= can edit

Grey=not active (don’t edit)

Red = formulas/populated data (don't edit)

2) Entering General Parameter Assumptions (use InputDataA_GeneralAssumptions)

In most cases you can choose "automatic" or "manual" version of each series from a drop-down menu

- if automatic, select a target value and the year it is achieved and the spreadsheet automatically generates a smooth path to get there

- if manual, you must type the values manually into the ""Manual" [user defined year by year]" yellow cells to the right in InputDataA and InputDataB (they become yellow when you select manual from the drop down menu)

Model 1, 2 and 3 uses the same general parameters as each other; Model 1s, 2s and 3s uses the same general parameters as each other("s" is for scenarios - see below)

The parameters which actually go into the calculations are listed in "Summary of Inputs based on User's choice" in the Model 1(s), Model 2(s) and Model 3(s) spreadsheets

3) Entering Model 1-, Model 2- or Model 3-specific parameters - Use InputDataB sheet

For Model 1, choose either "automated" or "manual" values for a path of I/Y (as above), these will not affect Model 2 or 3

For Model 2, choose between the types of growth target: a GDP per capita growth target, a headline GDP growth target, a GDP per capita levels target (does not affect Model 1 or 3)

- Then choose between "automated" or "manual" values for a path of the growth target. If automatic, you also need to choose an end date as above and the model generates a smooth path

- If choose "manual" then you need to enter the values corresponding to the type of growth target in InputDataB on the RHS row 13 and 19. Eg 5000 (for a GDP per capita levels target) or 0.06 (for a growth target)

- The model automatically interprets the "type" of these numbers, and converts them to an implied GDP per capita growth target the Model 2 and Model 2s sheets

For Model 3, choose either "automated" or "manual" values for a path of S/Y (as above), these will not affect Model 1 or 2

4) Changing initial assumptions, simulation years and other parameters

By default, initial values are calibrated as historical averages from various data sources (or taken from most recent year).

The user can change the first year of the simulation in the "Initial year for estimation" cell (top LHS of "input dataA"). For years up to 2018, we forecast starting values (see comment sticky notes in the input data sheet for details).

However, the user doesn't have to choose these starting values as the initial values for automatic paths

- to choose a different starting value, enter it it in the yellow cell next to "Initial value (user defined)"

- to use the historical average (from data) or most recent historical data just keep the "Initial value (user defined)" BLANK

- a summary of the actual initial value used (user defined or historical average) indicated in red

The user is also able to specify alterantive depreciation rates, initial K/Y or labor share in a similar way in the top LHS of the input sheet.

The initial value of real GDP per capita does not affect the operation of the model (which is all in growth rates) but does affect memorandum items. It can be set at the top LHS of the "InputDataA_GeneralAssumptions".

5) External Balance Constraints

The user can choose two types of constraints on the external sector (via a dropdown menu): Current Account Balance /Y or External Debt/Y

-- These govern the relationship beteen S/Y and I/Y, which are particularly important for Model 3

For the CAB/Y constraint, choose either manual or automatic via the drop down menu.

- for countries with a closed capital account, simply choose a current account balance constraint, and then set it equal to zero. Then S=I for all periods.

For the external debt/Y constraint, choose either manual or automatic via the drop down menu.

- for the external debt/Y option, the user also needs to choose an FDI/Y path (manual or automatic) -- this is not required for a current account balance/Y constraint

- if automatic paths the user can also choose choose the final target, date reached, and also an initial value (

- if manual, enter the paths for each year in the yellow cells on the RHS of InputDataA

6) Baseline vs Scenarios

There are two versions of each Model: a "baseline" version (the main one) and a "scenario" version (labelled "s")

Scenarios allows you to easily compare two outputs given different assumptions in the "GraphsA" and "GraphsB" worksheet

Model 1, 2, 3 apply to the "baseline". Model 1s, 2s, 3s apply to the "scenarios". Automatic and Manual (from the drop-down menu) apply to both Baseline and Scenario

- this means if you set a series to manual, you need to manually type in those values into "User defined, year by year" yellow cells in worksheet "InputDataA_ GeneralAssumptions" or "InputDataB_ModelSpecAssumptions" for both baseline and scenario

These switch to yellow (user able to edit) when you chose manual from the dropdown menu.

7) Instruction specfic for pre-Excel 2010 versions

In pre-2010 versions of Excel the dropdown menus don't work. But this is easy to fix by manually typing the values instead (making sure spelling is exact). Worksheet: InputDataA_ GeneralAssumptions

Country Name InputDataA_ GeneralAssumptions B3)

- lookup your country name in data>Cells B23+ edit the cell and copy the text of the country name in the edit bar at the top of the screen (DO NOT copy the cell, just the text - you will need unhide the "data" worksheet)

- edit InputDataA_ GeneralAssumptions>B3, and paste the name of county text into the edit bar at the top of the screen

- alternatively, just Type the Country name into InputDataA_ GeneralAssumptions>B3, making sure that the Country name is spelt correctly

Automatic vs Manual (Inputdata: Various Cells)

- Type "Automatic" or "Manual" (without quotes) to run that series in Automatic or Manual mode

- Type "Debt" or "CAB" (without quotes) InputDataA_ GeneralAssumptions>D60 to choose the type of external debt constraint

Output Target (Model 2 and 2s Only)

- Type "GDP Growth" or "GDP PC Growth" or "GDP PC Level" (without quotes) InputDataB_ ModelSpecAssumptions>D20 to choose the type of output target when using Model 2 or 2s

* in testing, occationally conditonal formatting would only update when one changed to a different tab.

8) Data for Calibration

The "DataSummary" tab contains the different sources of data to calibrate the model parameters and assumptions.

-“Vintage[date accessed]” is the date the data was downloaded.