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Forecasting Income and Education for the Distal Driver Formulation

For the basic distal driver formulation, GDP per capita at PPP (GDPPCP) and years of adult education (EdYrsAg25) are forecast endogenously within IFs.  GDP per capita is computed in the Economic Module as an annual flow variable (that is, it is generated anew each year), driven in part by underlying stocks such as capital supply and, in fact, years of adult education (both of which accrete or deplete very slowly over time). Adult education is computed in the Education Module using government spending on education as the main driver. For a more complete description of driver forecasting in IFs, please see