What is the "Base Case" Forecast?

Date: 
2014

To get anywhere, you have to start somewhere. And in the International Futures (IFs) integrated modeling system, we call that “somewhere” the Base Case. The Base Case in IFs represents a continuation of our current development path; it’s a picture of where the world seems to be going if nothing drastic happens—no major policy changes, no significant unforeseen disasters, no technological game changers. It plausibly describes how the world would develop if the same general trends and policy choices observed since the end of the Cold War continued without interruption.

When we do scenario analysis at the Frederick S. Pardee Center, this Base Case is key. It provides us a launching point, a forecast—yes, it’s a forecast too—with which we can compare other alternative scenarios. It allows us to gauge the relative effects of major policy interventions against a likely “status quo” version of the future.

To be clear, that doesn’t mean that the Base Case assumes everything will stay just the same as it is today—in fact, the thinking behind the Base Case is far from that. The scenario assumes that the world continues to change and unfold in line with our current expectations. Unlike some other baseline forecasts, which simply extrapolate static variables forward, our Base Case is dynamic, continuously shaped by the very same system relationships and the same endogenous growth mechanisms that make IFs so valuable in the first place.

What’s endogenous growth, you ask? We’ll get to that question next month.

For more on the Base Case in the meantime, check out this working paper. Or play around with some variables using the flexible displays feature in IFs to get a better idea where the Base Case says we’re headed.

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