Modelling economic dimensions of global sustainable development

Abstract

The article reveals the problems of “measuring” economic dimensions of global sustainable development of modern society, improves the existing set of indicators for an adequate quantitative assessment of economic growth and develops optimal mathematical models for integrated assessment of economic dimensions of global sustainable growth. The subject matter of the study includes the most important challenges of sustainability and direction relevant to economic activities, and also the main indicators of effectiveness of public economic policy, which provide information and scientific knowledge useful for identifying key factors of development. The main significant results of using methods of mathematical modeling for building models of economic growth have been examined. The main problem of mathematical modeling of economic component of sustainable development is an adequate choice of qualitative and quantitative indications, as well as development of more complex device for mathematical and computer modeling for analyzing features of economic phenomena and economic aspects of the function of sustainable development. It is claimed that the long-running economic crisis, a growing gap in access to advantages of economic progress, age disparity in wealth, income inequality in developed countries and increasing ecological degradation due to unsustainable practices have lead to the situation when economic policies of many countries do not adequately meet the needs of public welfare and society. The authors state that the problems enumerated above along with the sluggish growth call into question the efficiency of traditional models of economic growth. In addition, it is indicated that geopolitical tension and unstable currency are slowing down economic growth. The study provides a correlation analysis, factor analysis (principal component method), discriminant analysis (developing classification functions), and data mining (classification trees). A factor model for the quantitative assessment of economic component of sustainable development has been developed. A country classification by economic growth indicators is developed and the results are presented as a tree solution. An optimal discriminant model for building classification functions of country allocation by the Global Competitiveness Index (GCI) is constructed. This index is one of the basic dimensions of a long-term economic growth relevant to analyzed economic indicators of sustainable development. It is found that GCI is an adequate dimension of economic component of global sustainable development. The Global Talent Competitiveness Index, ICT Access Index and Corruption Perception Index are the most significant for country allocation by its levels