Static analysis, static projection, or static scoring is a simplified analysis wherein the effect of an immediate change to a system is calculated without regard to the longer-term response of the system to that change. If the short-term effect is then extrapolated to the long term, such extrapolation is inappropriate.
Its opposite, dynamic analysis or dynamic scoring, is an attempt to take into account how the system is likely to respond to the change over time. One common use of these terms is budget policy in the United States,[1] although it also occurs in many other statistical disputes.
Examples
A famous example of extrapolation of static analysis comes from overpopulation theory. Starting with Thomas Malthus at the end of the 18th century, various commentators have projected some short-term population growth trend for years into the future, resulting in the prediction that there would be disastrous overpopulation within a generation or two. Malthus himself essentially claimed that British society would collapse under the weight of overpopulation by 1850, while during the 1960s the book The Population Bomb made similar dire predictions for the US by the 1980s.
For economic policy discussions, predictions that assume no significant change of behavior in response to change in incentives are often termed static projection (and in the US Congressional Budget Office, "static scoring").[citation needed]
However, when applied to dynamically responsive systems, static analysis improperly extrapolated tends to produce results that are not only incorrect but opposite in direction to what was predicted, as shown in the following applications.[citation needed]
A Malthusian catastrophe occurs when population growth outpaces agricultural production, causing population to be limited by famine or war. It is named after Thomas Robert Malthus, who suggested that while technological advances could increase a society's supply of resources, such as food, and thereby improve the standard of living, the resource abundance would enable population growth, which would eventually bring the per capita supply of resources back to its original level. Some economists contend that since the industrial revolution, mankind has broken out of the trap. Others argue that the continuation of extreme poverty indicates that the Malthusian trap continues to operate. Others further argue that due to lack of food availability coupled with excessive pollution, developing countries show more evidence of the trap.
The technological singularity—also, simply, the singularity—is a hypothetical point in time at which technological growth becomes uncontrollable and irreversible, resulting in unforeseeable changes to human civilization. According to the most popular version of the singularity hypothesis, called intelligence explosion, an upgradable intelligent agent will eventually enter a "runaway reaction" of self-improvement cycles, each new and more intelligent generation appearing more and more rapidly, causing an "explosion" in intelligence and resulting in a powerful superintelligence that qualitatively far surpasses all human intelligence.
The Limits to Growth (LTG) is a 1972 report on the exponential economic and population growth with a finite supply of resources, studied by computer simulation. Commissioned by the Club of Rome, the findings of the study were first presented at international gatherings in Moscow and Rio de Janeiro in the summer of 1971. The report's authors are Donella H. Meadows, Dennis L. Meadows, Jørgen Randers, and William W. Behrens III, representing a team of 17 researchers.
Human reproduction planning is the practice of intentionally controlling the rate of growth of a human population. Historically, human population planning has been implemented with the goal of increasing the rate of human population growth. However, in the period from the 1950s to the 1980s, concerns about global population growth and its effects on poverty, environmental degradation and political stability led to efforts to reduce human population growth rates. More recently, some countries, such as China, Iran, and Spain, have begun efforts to increase their birth rates once again. While population planning can involve measures that improve people's lives by giving them greater control of their reproduction, a few programs, most notably the Chinese government's "one-child policy and two-child policy", have resorted to coercive measures.
Supply-side economics is a macroeconomic theory arguing that economic growth can be most effectively created by lowering taxes and decreasing regulation, by which it is directly opposed to demand-side economics. According to supply-side economics, consumers will then benefit from a greater supply of goods and services at lower prices and employment will increase.
In economics, economic equilibrium is a situation in which economic forces such as supply and demand are balanced and in the absence of external influences the (equilibrium) values of economic variables will not change. For example, in the standard text perfect competition, equilibrium occurs at the point at which quantity demanded and quantity supplied are equal. Market equilibrium in this case is a condition where a market price is established through competition such that the amount of goods or services sought by buyers is equal to the amount of goods or services produced by sellers. This price is often called the competitive price or market clearing price and will tend not to change unless demand or supply changes, and quantity is called the "competitive quantity" or market clearing quantity. But the concept of equilibrium in economics also applies to imperfectly competitive markets, where it takes the form of a Nash equilibrium.
In economics and engineering, the price–performance ratio refers to a product's ability to deliver performance, of any sort, for its price. Generally speaking, products with a lower price/performance ratio are more desirable, excluding other factors.
In sociology, the post-industrial society is the stage of society's development when the service sector generates more wealth than the manufacturing sector of the economy.
In mathematics, extrapolation is a type of estimation, beyond the original observation range, of the value of a variable on the basis of its relationship with another variable. It is similar to interpolation, which produces estimates between known observations, but extrapolation is subject to greater uncertainty and a higher risk of producing meaningless results. Extrapolation may also mean extension of a method, assuming similar methods will be applicable. Extrapolation may also apply to human experience to project, extend, or expand known experience into an area not known or previously experienced so as to arrive at a knowledge of the unknown. The extrapolation method can be applied in the interior reconstruction problem.
In economics, a model is a theoretical construct representing economic processes by a set of variables and a set of logical and/or quantitative relationships between them. The economic model is a simplified, often mathematical, framework designed to illustrate complex processes. Frequently, economic models posit structural parameters. A model may have various exogenous variables, and those variables may change to create various responses by economic variables. Methodological uses of models include investigation, theorizing, and fitting theories to the world.
Malthusianism is the idea that population growth is potentially exponential while the growth of the food supply or other resources is linear, which eventually reduces living standards to the point of triggering a population die off. It derives from the political and economic thought of the Reverend Thomas Robert Malthus, as laid out in his 1798 writings, An Essay on the Principle of Population. Malthus believed there were two types of ever-present "checks" that are continuously at work, limiting population growth based on food supply at any given time:
Future studies, futures research or futurology, is the systematic, interdisciplinary and holistic study of social and technological advancement, and other environmental trends, often for the purpose of exploring how people will live and work in the future. Predictive techniques, such as forecasting, can be applied, but contemporary futures studies scholars emphasize the importance of systematically exploring alternatives. In general, it can be considered as a branch of the social sciences and parallel to the field of history. Futures studies seeks to understand what is likely to continue and what could plausibly change. Part of the discipline thus seeks a systematic and pattern-based understanding of past and present, and to explore the possibility of future events and trends.
In futures studies and the history of technology, accelerating change is a perceived increase in the rate of technological change throughout history, which may suggest faster and more profound change in the future and may or may not be accompanied by equally profound social and cultural change.
American environmental author Daniel Quinn coined the term Food Race to describe an understanding of the current overpopulation emergency as a perpetually escalating crisis between growing human population and growing food production, which is fueled by the latter. Quinn argues that as the worldwide human population increases, the typical international response is to more intensely produce and distribute food to feed these greater numbers of people. However, assuming that population increases according to increased food availability, Quinn argues that this response only ends up leading to an even larger population and thus greater starvation in the end. Therefore, Quinn's clear solution to the Food Race—to stop producing so much food—is not generally a common-sense or intuitive response; instead, it derives from seemingly counter-intuitive or "outside-the-box" thinking.
A self-defeating prophecy is the complementary opposite of a self-fulfilling prophecy; a prediction that prevents what it predicts from happening. This is also known as the prophet's dilemma.
Dynamic scoring is a forecasting technique for government revenues, expenditures, and budget deficits that incorporates predictions about the behavior of people and organizations based on changes in fiscal policy, usually tax rates. Dynamic scoring depends on models of the behavior of economic agents which predict how they would react once the tax rate or other policy change goes into effect. This means the uncertainty induced in predictions is greater to the degree that the proposed policy is unlike current policy. Unfortunately, any such model depends heavily on judgment, and there is no evidence that it is more effective or accurate.
The book An Essay on the Principle of Population was first published anonymously in 1798, but the author was soon identified as Thomas Robert Malthus. The book warned of future difficulties, on an interpretation of the population increasing in geometric progression while food production increased in an arithmetic progression, which would leave a difference resulting in the want of food and famine, unless birth rates decreased.
In macroeconomics, multiplier uncertainty is lack of perfect knowledge of the multiplier effect of a particular policy action, such as a monetary or fiscal policy change, upon the intended target of the policy. For example, a fiscal policy maker may have a prediction as to the value of the fiscal multiplier—the ratio of the effect of a government spending change on GDP to the size of the government spending change—but is not likely to know the exact value of this ratio. Similar uncertainty may surround the magnitude of effect of a change in the monetary base or its growth rate upon some target variable, which could be the money supply, the exchange rate, the inflation rate, or GDP.
Famine 1975! America's Decision: Who Will Survive? is a best-selling 1967 book by William and Paul Paddock. The brothers describe the rapidly growing population of the world, and a situation in which they believe it would be impossible to feed the entire global population within the short-term future. They believed that widespread famine would be the inevitable result, by 1975.
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