🛒 Aggregate Demand
Total purchasing power in the economy from wages and transfers. When demand falls below production capacity, GDP growth stalls regardless of productivity (Henry Ford Paradox: robots produce but unemployed can't buy). This addresses the critical demand-side gap in economic modeling.
Demand = (Wages × Employed + UBI × Population) × Deflation
💸 Fiscal Pressure
UBI cost as percentage of GDP. High UBI requires high taxes, which slow corporate investment and automation adoption. Creates the negative feedback loop missing from simpler models: UBI helps demand but hurts supply-side investment.
0-10%: Sustainable
10-20%: Straining
20%+: Critical
📉 Technological Deflation
Automation reduces production costs, lowering prices over time. This increases real purchasing power even if nominal wages fall. A key mechanism allowing populations to survive technological transition - goods become cheaper faster than incomes fall.
Real GDP = Nominal GDP × (1/Price Index)
⚖️ Demand-Supply Gap
Difference between aggregate demand and production capacity. Negative gap = demand shortage: factories can produce more than people can afford to buy. This constrains GDP growth regardless of productivity - the mathematical proof of why UBI matters.
>0%: Demand sufficient
-10% to 0: Mild shortage
<-10%: Demand crisis
📈 S-Curve (Logistic Growth)
Mathematical model of technology diffusion. Adoption starts slow (innovators), accelerates rapidly (mass market), then plateaus (saturation). The formula captures this: growth is proportional to both current adoption and remaining potential. Based on Bass (1969) and Rogers' Diffusion of Innovations.
dρ/dt = κ · α · ρ · (1 - ρ/ρmax) · (1 - friction)
📊 Gini Coefficient
Standard measure of income/wealth inequality (0-1). Zero = perfect equality, One = one person owns everything. Automation increases Gini (capital owners capture gains), while UBI and reskilling reduce it by redistributing benefits.
0.25-0.35: Nordic levels
0.35-0.45: US current
>0.45: Instability risk
🔥 Social Stress Index
Composite indicator (0.1-0.95) of societal tension from unemployment, inequality, pace of change, and fiscal pressure. High stress reduces tech acceptance, slows innovation, and risks social unrest. Also includes fiscal stress - high taxes for UBI create political backlash even if economically necessary.
0.1-0.4: Stable society
0.4-0.7: Growing tension
>0.7: Crisis/unrest risk
⚡ Productivity Index
Economic output per unit of input, indexed to 100 in base year (2024). Automation boosts productivity through AI efficiency gains. Each sector has a multiplier (μ) determining how much productivity each automation point delivers. Technology sector: μ=4.0, Education: μ=1.5.
Π = 100 × (1 + ρ × μ × 0.1)
🤖 Tech Acceptance Rate
Population percentage viewing AI/automation positively (starts 65%). Evolves based on social stress: successful transitions increase acceptance, while job losses decrease it. Higher acceptance → faster automation adoption, lower regulatory friction. Creates reinforcing loop.
↑ Low stress, visible benefits
↓ High unemployment, rapid displacement
🌐 Economic Inclusivity
Measure (0.3-0.95) of how broadly automation gains are shared. Low inclusivity = benefits concentrate among tech owners and high-skilled workers. Influenced inversely by Gini, positively by reskilling and UBI. Higher inclusivity → sustainable growth, social stability.
I = 0.72 - (G-0.39)×0.5 + R×0.3 + UBI×0.15
💡 Innovation Index
Multiplier (1.0-3.0) for economy's capacity to create new industries and jobs. Higher automation and tech acceptance fuel innovation. Affects new job creation: more innovation means automation creates proportionally more new roles (AI trainers, robot supervisors, prompt engineers).
Innovation = 1 + ρ×1.5 + (tech-0.5)×0.5
💰 Universal Basic Income (UBI)
Unconditional cash transfers to all citizens ($0-$36,000/yr). Directly reduces Gini (redistribution) and stress (economic security). Unlike welfare, no work disincentive cliff. Note: high UBI creates fiscal pressure that slows automation investment.
Gini: -0.08 at max
Stress: -0.20 at max
Demand: ↑ supports consumption
🎓 Reskilling Programs
Government workforce retraining (% of GDP). Helps displaced workers transition to new economy jobs. Effectiveness varies by scenario (8%-35% efficiency). Model note: 50% reintegration rate is optimistic - real structural unemployment may be stickier.
Unemployment: direct reduction
Gini: -0.05 per 1% GDP
Inclusivity: enables mobility
⚙️ Automation Rate (ρ)
Fraction of sector tasks performed by AI/robots (0-100%). Each sector has initial level (ρ₀) and maximum potential (ρmax). Logistics: 90% max (autonomous vehicles), Education: 35% max (human essential). Higher automation → productivity gains + job displacement.
30%: Early automation
50%: AI-augmented economy
70%+: Near full automation
🔄 Feedback Loops
Circular cause-effect chains where outputs become inputs. Reinforcing (R): automation→productivity→profits→investment→more automation. Balancing (B): automation→unemployment→stress→regulation→slower automation. Understanding loops predicts non-linear behavior.
R: Productivity spiral ↑↑
B: Social constraint ↓↑
📉 Regulatory Friction (f)
Dampening factor (0-50%) representing how regulation slows automation. Varies by scenario: Accelerated (5%) = deregulation, Resistance (50%) = strong labor protection. Effective growth = base × (1-f). Note: Tax drag from UBI adds implicit friction.
Accelerated: 5%
Managed: 15%
Baseline: 20%
Resistance: 50%
🏛️ Worker Ownership
Percentage of AI/automation capital owned by workers or public (0-50%). Through ESOPs, cooperatives, sovereign wealth funds, or tokenized equity. When workers own the robots, they receive dividends instead of just wages - solving the "who buys the products?" problem without government transfers.
Gini: -0.25 at 100% ownership
Stress: -0.30 buffer (psychological)
Demand: ↑ via dividends
💎 Capital Gains & Dividends
Automation generates ~30% of GDP×automation_rate in capital profits annually. Worker ownership entitles workers to proportional dividends. At 35% worker ownership and 50% automation, this yields ~$15,000/person/year in passive income - potentially replacing wages entirely.
Dividend = (GDP × ρ × 0.3 × ownership%) / population
🎯 Autonomous Solvency
Percentage of population that can survive on passive income alone (dividends + robot tax transfers) without wages or government UBI. This is the "post-work" readiness metric. At 100%, society has achieved true economic freedom from labor - the end goal of the cooperative scenario.
0-25%: Traditional economy
25-50%: Transition phase
>50%: Post-scarcity signals
🤖 Robot Tax
Tax on automation profits (0-30%) redistributed to population. Alternative to UBI - funded by capital rather than general taxation. Reduces Gini and funds social programs, but creates some investment drag. Can offset UBI fiscal burden when both are used together.
Gini: -0.10 at 30%
Funds UBI without income tax
Investment drag: ~50% of rate
🌍 Global Competition
World average automation grows ~3%/year from 20% baseline. If your economy falls >10% behind, export competitiveness suffers and GDP growth is penalized. This creates external pressure to automate regardless of domestic social concerns - the "race to the bottom" dynamic.
>+5%: Competitive advantage
±5%: Parity
<-10%: Export penalty active