Methodology & Sources

Understanding the data and calculations behind trajectory projections

Data Sources

Primary Sources

  • • World Bank: GDP per capita (PPP), Real GDP growth, Capital formation
  • • OECD: R&D expenditure, Labor productivity indices
  • • Eurostat: EU-specific economic indicators

Note: This prototype uses realistic sample data for demonstration purposes. Production version would connect to live APIs.

Projection Methodology

Compound Annual Growth Rate (CAGR)

Projections are based on the compound annual growth rate calculated from recent historical data:

CAGR = (Ending Value / Beginning Value)^(1/years) - 1

Future Value Calculation

Future projections apply the growth rate with optional scenario adjustments:

Future Value = Current Value × (1 + growth_rate + scenario_adjustment)^years

Scenario Adjustments

  • • Baseline: Uses historical CAGR without adjustment
  • • Optimistic (+0.5pp): Adds 0.5 percentage points to annual growth
  • • Pessimistic (-0.5pp): Subtracts 0.5 percentage points from annual growth

Important Limitations

Constant Rate Assumption: Projections assume growth rates remain constant, which rarely occurs in reality due to economic cycles, policy changes, and external shocks.

No Structural Changes: Does not account for demographic transitions, technological disruptions, or changes in economic structure.

Data Comparability: Cross-country comparisons may be affected by differences in statistical methodologies and data collection practices.

Indicator Definitions

GDP per Capita (PPP)

Gross domestic product per capita adjusted for purchasing power parity, in constant international dollars.

Real GDP Growth

Annual percentage change in GDP at constant prices, adjusted for inflation.

R&D Expenditure

Research and development expenditure as a percentage of GDP, including both public and private spending.

Capital Formation

Gross capital formation as a percentage of GDP, measuring investment in fixed assets and changes in inventories.

For Policy Analysis

These projections are designed to illustrate the long-term implications of different growth trajectories for policy discussions. They should be interpreted as scenarios rather than forecasts, and used alongside other analytical tools for comprehensive policy evaluation.