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Economies, Volume 6, Issue 2 (June 2018)

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Open AccessArticle The Energy Industry in the Czech Republic: On the Way to the Internet of Things
Received: 15 May 2018 / Revised: 29 May 2018 / Accepted: 31 May 2018 / Published: 11 June 2018
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Abstract
This article describes and discusses research into the perspectives for deploying the IoT (Internet of Things) within the Czech energy industry. Our conclusions are based on empirical research performed among 50 energy-industry experts in 2016 and 2017. This was two-stage research in which
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This article describes and discusses research into the perspectives for deploying the IoT (Internet of Things) within the Czech energy industry. Our conclusions are based on empirical research performed among 50 energy-industry experts in 2016 and 2017. This was two-stage research in which we held interviews with these experts in order to select the set of the most acceptable IoT technologies for deployment in the energy industry, and then used the TOPSIS method to select the most suitable technologies among them for deployment in the Czech environment. For use in determining the most suitable technologies, we also defined—with the help of the mentioned experts—individual selection parameters and weightings for them, enabling us to apply the TOPSIS method to the selected set of technologies. Our result was the selection of the SIGFOX IoT technology. Full article
(This article belongs to the Special Issue Economic Growth as a Consequence of the Industry 4.0 Concept)
Open AccessArticle Export-Led Growth, Global Integration, and the External Balance of Small Island Developing States
Received: 5 March 2018 / Revised: 17 April 2018 / Accepted: 7 May 2018 / Published: 4 June 2018
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Abstract
Small, open developing economies in general, and small island developing states (SIDS) in particular, have specific macroeconomic characteristics due both to their openness and their small size. Small size means they can never have fully independent capital-intensive domestic economies, so to raise incomes
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Small, open developing economies in general, and small island developing states (SIDS) in particular, have specific macroeconomic characteristics due both to their openness and their small size. Small size means they can never have fully independent capital-intensive domestic economies, so to raise incomes they must become thoroughly integrated into the global economy. The export sector thus becomes the engine of growth; it provides domestic income, which is spent on domestic goods and imports, driving overall economic output through a multiplier effect. Building on work within the Caribbean structuralist tradition, this paper presents a demand-driven model that includes capital accumulation and external debt. Given the limited data available for many small island states, the model explicitly represents the external macroeconomic balance. An aggregate representation of the national economy is derived formally from a two-sector model, following models of a petroleum exporting country developed Seers and Bruce and Girvan. The model’s performance was evaluated against the historical performance of the Caribbean countries of Barbados, Jamaica and Trinidad and Tobago. Full article
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Open AccessArticle The Income Equalization System among Municipalities in Norway: Strengths and Implications
Received: 13 March 2018 / Revised: 17 April 2018 / Accepted: 9 May 2018 / Published: 28 May 2018
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Abstract
Norway is a leading nation pursuing egalitarian public policies. With an aim to smooth out income differences between municipalities and to stabilize individual municipality’s revenue over time, Norway has implemented a scheme called the income equalization system among municipalities. The scheme, which transfers
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Norway is a leading nation pursuing egalitarian public policies. With an aim to smooth out income differences between municipalities and to stabilize individual municipality’s revenue over time, Norway has implemented a scheme called the income equalization system among municipalities. The scheme, which transfers revenue to poor municipalities, helps to maintain similar welfare services in all municipalities. We present and illustrate the model with data from all municipalities in Norway. We also demonstrate how the scheme helps stabilize tax revenue across municipalities over time. Furthermore, we show how the scheme can cause poor municipalities to have reduced incentives to increase their tax revenue. Full article
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Open AccessArticle Estimating the Effects of Human Capital Constraints on Innovation in the Caribbean
Received: 10 April 2018 / Revised: 4 May 2018 / Accepted: 18 May 2018 / Published: 22 May 2018
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Abstract
Human capital, as reflected in education levels and skills, and innovation is an important engine of economic growth. The Caribbean is deficient in both: lower than expected GDP growth rates are accompanied by relatively low innovation at the firm level, and the workforce
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Human capital, as reflected in education levels and skills, and innovation is an important engine of economic growth. The Caribbean is deficient in both: lower than expected GDP growth rates are accompanied by relatively low innovation at the firm level, and the workforce is characterised by skills deficiencies and educational mismatches. In that regard, this paper exploits firm-level data covering 13 Caribbean countries to examine the extent to which innovation, a key driver of productivity growth, is affected by firms’ inability to find appropriately educated and skilled workers to fill key positions in its organizational structure, which is estimated using Probit models distinguishing between past and future innovation decisions. The econometric analysis finds that firms that have difficulty finding new skilled employees are less likely to engage in any type of innovation compared to those that can, and this is also true for decisions about future technological and non-technological innovations. Moreover, firms that face challenges finding employees with the required core and job-related skills at the managerial and professional levels are also less likely to innovate. Finally, while in-firm training is found to increase the probability of innovation, its magnitude is low. Full article
(This article belongs to the Special Issue Innovation and Economic Development)
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Open AccessArticle The Human Development Index as Isoelastic GDP: Evidence from China and Pakistan
Received: 19 November 2017 / Revised: 2 April 2018 / Accepted: 16 April 2018 / Published: 21 May 2018
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Abstract
Gross domestic product (GDP) is shown to possess three new desiderata. First, GDP is almost perfectly correlated over time with the first principal component of its three classical indicators. Second, this principal component is in a class of weighted indexes ancillary to GDP.
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Gross domestic product (GDP) is shown to possess three new desiderata. First, GDP is almost perfectly correlated over time with the first principal component of its three classical indicators. Second, this principal component is in a class of weighted indexes ancillary to GDP. Each ancillary index informs policy as to allocation of resources over the three GDP indicators. Third, a country-specific power of GDP almost perfectly predicts the United Nation’s Human Development Index (HDI). These findings are brought by principal components and regression analyses of time series supplied by the World Bank and the United Nations. Axiomatic HDI computation is carried out without survey sampling, probabilistic inference, significance testing, or even HDI data. Full article
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Open AccessArticle Exchange Rate and Oil Price Interactions in Selected CEE Countries
Received: 5 November 2017 / Revised: 23 April 2018 / Accepted: 4 May 2018 / Published: 14 May 2018
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Abstract
This paper reports a study on the causal dynamics between spot oil price, exchange rates, and stock prices in Poland, the Czech Republic, Hungary, Romania, and Serbia. The results are compared with a benchmark analysis in which U.S. monthly data are used, and
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This paper reports a study on the causal dynamics between spot oil price, exchange rates, and stock prices in Poland, the Czech Republic, Hungary, Romania, and Serbia. The results are compared with a benchmark analysis in which U.S. monthly data are used, and time periods are selected according to the flexibility of exchange rate regimes in each country. A period between 2000 and 2015 is analyzed. The methodology is based on the Granger causality test, and the non-linear Diks–Panchenko test, while the causality in variance is checked with the Hafner–Herwartz test. Full article
(This article belongs to the Special Issue Falling Oil Prices: Economic and Financial Implications)
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Open AccessArticle Parental Education Better Helps White than Black Families Escape Poverty: National Survey of Children’s Health
Received: 4 January 2018 / Revised: 13 February 2018 / Accepted: 14 February 2018 / Published: 7 May 2018
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Abstract
According to the Blacks’ Diminished Return theory, the health effects of high socioeconomic status (SES) are systemically smaller for Black compared to White families. One hypothesis is that due to the existing structural racism that encompasses residential segregation, low quality of education, low
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According to the Blacks’ Diminished Return theory, the health effects of high socioeconomic status (SES) are systemically smaller for Black compared to White families. One hypothesis is that due to the existing structural racism that encompasses residential segregation, low quality of education, low paying jobs, discrimination in the labor market, and extra costs of upward social mobility for minorities, Black families face more challenges for leveraging their education to escape poverty. Aims: Using a nationally representative sample of American families with children, this study investigated racial variation in the effects of highest education of parents on family’s ability to scale poverty, defined as the household’s income-to-needs ratio. Methods: This cross-sectional study used data from the National Survey of Children’s Health (NSCH) 2003–2004—a nationally representative telephone survey that included 86,537 parents of children 0–17 years old. The sample was composed of White (n = 76,403, 88.29%) and Black (n = 10,134, 11.71%) families. The independent variable was highest education of the parents. The dependent variable was household poverty status (income-to-needs ratio). Race was the focal moderator. Linear regression was used in the pooled sample, as well as by race. Results: In the pooled sample, higher education of parents in the household was associated with lower risk of poverty. Race, however, interacted with parental education attainment on household-income-to-needs ratio, indicating smaller effects for Black compared to White families. Lower number of parents and higher number of children in Black families did not explain such racial disparities. Conclusions: The economic gain of parental education on helping family escape poverty is smaller for Black than White families, and this is not as a result of a lower parent-to-child ratio in Black households. Policies should specifically address structural barriers in the lives of all minorities to minimize the diminished return of SES resources across racial minority groups. Policies should also enhance quality of education and reduce the extra cost of upward social mobility for racial minorities. As the likely causes are multilevel, the solutions should also be multilevel. Without such interventions, it may be very difficult if not impossible to eliminate the existing economic and health gap between racial groups. Full article
(This article belongs to the Special Issue The Role of Education and Health in Economic Development)
Open AccessArticle Effects of Conditional Cash Transfers (CCT) in Anti-Poverty Programs. An Empirical Approach with Panel Data for the Mexican Case of PROSPERA-Oportunidades (2002–2012)
Received: 23 October 2017 / Revised: 23 March 2018 / Accepted: 2 April 2018 / Published: 1 May 2018
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Abstract
Conditional Cash Transfer Programs (CCT) have been implemented in México and Latin America since the late 1990’s. This type of program focuses on providing social government services by way of direct cash transfers to poor families that are often conditioned to the use
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Conditional Cash Transfer Programs (CCT) have been implemented in México and Latin America since the late 1990’s. This type of program focuses on providing social government services by way of direct cash transfers to poor families that are often conditioned to the use of public education and health services. Despite the apparent short-term success of these CCT programs in the Latin American context, there still is much debate about whether CCT programs are effective in alleviating poverty. This paper analyzes the effectiveness of conditional cash transfer programs as a long-term incentive in the use of public services—health and education—among beneficiary families of PROSPERA-Oportunidades in Mexico. The Average Effect of Treatment on the Treated (ATT) for the time period 2002–2012 is estimated based on data from the Mexican Family Life Survey (MxFLS) using Propensity Score Matching (PSM). The results show that the program’s impact on the use of preventive health and education services by poor families cannot be sustained in the long-term, which puts in doubt the effectiveness of this social protection intervention program in combating poverty in Mexico. Full article
Open AccessArticle Private Sector Credit and Inflation Volatility
Received: 8 December 2017 / Revised: 21 March 2018 / Accepted: 2 April 2018 / Published: 24 April 2018
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Abstract
This paper investigates the effect of inflation volatility on private sector credit growth. The results indicate that private sector credit growth is positively linked to the one period lagged inflation volatility. Given that past monetary policy actions continue to affect the targeted variables
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This paper investigates the effect of inflation volatility on private sector credit growth. The results indicate that private sector credit growth is positively linked to the one period lagged inflation volatility. Given that past monetary policy actions continue to affect the targeted variables due to the substantial lags in the transmission mechanism, the positive response of private sector credit growth to past inflation volatility suggests a credible monetary policy regime in Uganda, which has led to a reduction in the level of macroeconomic uncertainty and the restoration of favorable economic conditions and prospects, thus increasing the demand for credit. Further, the study finds that the lagged private sector credit growth, nominal exchange rate, and inflation have a statistically significant effect on private sector credit growth while financial innovation, interest rates, and GDP growth appear not to be important determinants of private sector credit growth. The robustness of our findings is confirmed by sensitivity checks. Full article
(This article belongs to the Special Issue Economic Development in Africa)
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Open AccessArticle The Effects of Fiscal Policy on Non-Oil Economic Growth
Received: 23 January 2018 / Revised: 23 March 2018 / Accepted: 29 March 2018 / Published: 17 April 2018
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Abstract
We investigate non-oil sector effects of fiscal policy in Azerbaijan over a long time period in which a recent low oil prices sample is incorporated. To obtain robust empirical findings, we use different test and estimation methods as well as address small-sample bias
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We investigate non-oil sector effects of fiscal policy in Azerbaijan over a long time period in which a recent low oil prices sample is incorporated. To obtain robust empirical findings, we use different test and estimation methods as well as address small-sample bias issues in the extended production function framework. Results show that fiscal policy has a statistically significant positive impact on the non-oil sector both in the long and short run. However, the size of the impact is small compared to the findings of earlier studies due to, we believe, the low oil-price environment and different specifications used. Azerbaijani policymakers should take measures to compensate for the declining share of oil revenues in government revenues. They may consider increasing tax rates, import and export fees, energy and other tariffs as rapid remedies to fill the budget but these measures might hurt economic development. Alternative and less harmful remedies would be optimizing government spending, strongly monitoring ongoing projects, and phasing out social and infrastructure projects, which make lower contributions to growth. Our research opens the way for further investigation of this topic for the oil exporting economies in the future. Full article
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Open AccessArticle Shaking up the Firm Survival: Evidence from Yogyakarta (Indonesia)
Received: 30 November 2017 / Revised: 2 March 2018 / Accepted: 21 March 2018 / Published: 9 April 2018
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Abstract
The survival of firms under changes in the business environment caused by exogenous shocks can be explained using economic Darwinism. Exogenous shocks can cause ‘cleansing effects’. Shocks clean out unproductive firms so that available resources are allocated to the remaining more productive firms.
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The survival of firms under changes in the business environment caused by exogenous shocks can be explained using economic Darwinism. Exogenous shocks can cause ‘cleansing effects’. Shocks clean out unproductive firms so that available resources are allocated to the remaining more productive firms. However, shocks may also force out young firms that have the potential to be highly productive in the future, which will lower the average productivity of industries. This is known as the ‘scarring effect’ of shocks. Therefore, the overall impact of exogenous shocks on the allocation of resources depends on the relative magnitude of cleansing and scarring effects. This paper investigates this natural selection mechanism after the Yogyakarta earthquake in 2006. The study uses data on medium-sized and large manufacturing firms in the Yogyakarta province collected by the Indonesian Statistical Agency. The main finding of this paper is that firms that had higher productivity prior to the earthquake in 2006 were more likely to survive after the earthquake, which suggests the existence of a natural selection mechanism, specifically cleansing effects. There is no evidence of the scarring effects of the earthquake on the new entrants. Full article
(This article belongs to the Special Issue Natural Hazards and Economic Development)
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Open AccessArticle Crime Statistics: Modeling Theft in Favour of Victims’ Choices
Received: 11 December 2017 / Revised: 10 February 2018 / Accepted: 27 March 2018 / Published: 4 April 2018
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Abstract
The number of reported property thefts has dropped steeply in many European countries over the last 15 years. One reason for this could be that people have become more honest, which would imply that fewer resources should be allocated to the police and
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The number of reported property thefts has dropped steeply in many European countries over the last 15 years. One reason for this could be that people have become more honest, which would imply that fewer resources should be allocated to the police and to crime prevention measures. In this paper, we have elaborated upon some alternative explanatory factors behind the decrease in the number of reported crimes within a utility-maximizing model where both thefts and victims are behaving rationally. Increased time and travelling costs for reporting, economic growth and a lower rate of solving crime could all explain the development in the reported crime rate. Within this theoretical approach, the nominal crime rate could decrease, while the real crime rate either remains constant or even increases. Applying the number of reported thefts as the sole or main parameter for allocating resources for crime prevention measures may result in a sub-optimal resource allocation. Developments in the number of reported thefts must therefore be supplemented by other indicators to provide a better basis to ensure an optimal allocation of police resources to combat theft. Estimates of unreported crimes must also be included as part of the basis of these allocation decisions. Full article
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Open AccessArticle The Basic, the Solid, the Site-Specific and the Full or Total Index of Sustainable Economic Welfare (ISEW) for Turkey
Received: 3 October 2017 / Revised: 2 March 2018 / Accepted: 19 March 2018 / Published: 3 April 2018
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Abstract
The Index of Sustainable Economic Welfare (ISEW) has been calculated in various ways for various countries and for various time spans. Based on the degree of objectivity, the Basic, Solid, and Site-specific ISEW are separated, whose sum constitutes the Total or Full ISEW.
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The Index of Sustainable Economic Welfare (ISEW) has been calculated in various ways for various countries and for various time spans. Based on the degree of objectivity, the Basic, Solid, and Site-specific ISEW are separated, whose sum constitutes the Total or Full ISEW. The paper proposes some guidelines for countries and smaller forms of state organizations, to apply and re-state their sustainable GDP, thus rendering it a useful figure as reported vis-à-vis the long established GDP. To demonstrate this theoretical advancement, the Turkish economy is used for an application. Turkey is a dynamic emerging economy, given its rapid GDP increase over the past two decades and the population increase on the one hand. On the other hand, it is afflicted by social inequalities and environmental problems, which if they were to be abated, they would certainly deduct from the increased income achieved so far. Full article
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Open AccessArticle The Rental Prices of the Apartments under the New Tourist Environment: A Hedonic Price Model Applied to the Spanish Sun-and-Beach Destinations
Received: 16 February 2018 / Revised: 21 March 2018 / Accepted: 23 March 2018 / Published: 3 April 2018
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Abstract
The purpose of this article is to estimate a model of hedonic prices that is applied to apartments that are rented in the Spanish coastline, based on data that has been provided by Tecnitasa. The results confirm the relevance of the determinants that
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The purpose of this article is to estimate a model of hedonic prices that is applied to apartments that are rented in the Spanish coastline, based on data that has been provided by Tecnitasa. The results confirm the relevance of the determinants that were previously identified by the literature and point to new determinants, such as tourism competitiveness and online reputation, as future drivers of prices in the new tourist environment. Full article
(This article belongs to the Special Issue Tourism Economics)
Open AccessArticle The Relationship between Export and Growth: Panel Data Evidence from Turkish Sectors
Received: 29 October 2017 / Revised: 9 March 2018 / Accepted: 16 March 2018 / Published: 2 April 2018
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Abstract
The aim of this study is to examine the impact of sectoral exports on economic growth in Turkey over the period 2000–2015. To this end, empirical models are estimated using panel data techniques in which quarterly data are gathered for eight sectors. Findings
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The aim of this study is to examine the impact of sectoral exports on economic growth in Turkey over the period 2000–2015. To this end, empirical models are estimated using panel data techniques in which quarterly data are gathered for eight sectors. Findings in the case of the pooled panel indicate the validity of the export-led growth hypothesis. Disaggregated evidences, on the other hand, reveal the validity of export-led growth hypothesis in the case of (i) agriculture and forestry; (ii) fishing; (iii) mining and quarrying; (iv) manufacturing; (v) electricity, gas and water supply; and (vi) wholesale and retail trade while it is found to be invalid in the case of (i) real estate, renting and business activities; and (ii) other community, social and personal service activities. The sectors that have the highest growth contributions are listed as follows: (i) agriculture and forestry; (ii) mining and quarrying; and (iii) manufacturing. Causality results also provide a strong support in favor of an export-led growth hypothesis for four sectors in addition to the feedback hypothesis which is valid for three sectors. Full article
Open AccessArticle Money and Pay-As-You-Go Pension
Received: 16 October 2017 / Revised: 19 March 2018 / Accepted: 22 March 2018 / Published: 29 March 2018
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Abstract
This paper presents examination of how a pension policy affects income growth and the inflation rate in a utility model. Even if the contribution rate of pension increases because of an aging society, an aging society increases income growth and the inflation rate.
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This paper presents examination of how a pension policy affects income growth and the inflation rate in a utility model. Even if the contribution rate of pension increases because of an aging society, an aging society increases income growth and the inflation rate. Moreover, this paper presents examination of the optimal growth rate of the money supply. Because of the pension policy, the optimal growth rate of money stock changes. This result is intuitive because a pay-as-you-go pension changes capital accumulation. Therefore, the income growth rate should be changed to raise the welfare of all generations. Full article
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Open AccessArticle Identifying Sustainability and Knowledge Gaps in Socio-Economic Pathways Vis-à-Vis the Sustainable Development Goals
Received: 31 October 2017 / Revised: 18 February 2018 / Accepted: 19 February 2018 / Published: 26 March 2018
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Abstract
With the Sustainable Development Goals (SDGs), the global community has set itself an ambitious development agenda. Current analytical and quantitative modeling capabilities fall short of being able to capture all 17 SDGs and their targets. Even highly ambitious and optimistic pathways currently used
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With the Sustainable Development Goals (SDGs), the global community has set itself an ambitious development agenda. Current analytical and quantitative modeling capabilities fall short of being able to capture all 17 SDGs and their targets. Even highly ambitious and optimistic pathways currently used in research, such as SSP1/SSP1-2.6, do not meet all SDGs (sustainability gaps) and fail to provide information on some of them (knowledge gaps). We show that for research and modeling purposes, the SDG targets can serve as a basis but need to be operationalized to reduce complexity and also to account for long-term sustainability concerns beyond 2030. We have explored here the requirements for assessing more comprehensively the sustainability of development pathways, guided by holistic interpretation of the SDGs to enable an assessment of the potential embedded synergies and trade-offs between the economic, social and environmental objectives. We see this as call for action for science to work on filling these gaps. At the same time, this is also a call for policy makers and the global community to close the sustainability gaps that emerge from such analysis. We anticipate that such analysis will provide useful information for policy advice and investment decisions during implementation of the UN 2030 Agenda. Full article
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