# **<u>Table 1: No‐Conflict Baseline Simulation ‐</u>**

**Values for Parameters, Initial Conditions and Projected Variables**

|||**I**<br>**2010**|**nput value:**<br>**A**|<br>**A**|
|---|---|---|---|---|
|**Parameter/Variable***||**/**<br>**Calibrated**|**verage,**<br>**Pre‐**|**verage,**<br>**2011‐30**|
||**Note**||**Conflict**||
|**A. Consta**<br>|**nt Parame**<br>|**ters**<br>|||
|Labor shareβ|_(1)_|0.520|||
|Aggregate capital depreciation rateδ|_(2)_|0.048|||
|Public capital depreciation rateδ<sup>�</sup>|_(2)_|0.031|||
|Private capital depreciation rateδ<sup>�</sup>|_(3)_|0.062|||
|<br>**B. Initia**<br>|<br>**l Conditio**<br>|**ns**<br>|||
|Initial capital‐to‐output ratioK�/Y�|_(4)_|2.560|||
|Public capital share of total capitalK<sup>�</sup>/K|_(5)_|0.450|||
|Initialpublic capital‐to‐output ratioK�<br>�/Y�|_(6)_|1.152|||
|Initialprivate capital‐to‐output ratioK�<br>�/Y�|_(6)_|1.408|||
|**C. Projected Variables, C**<br>|**entral Pa**<br>|**th (2010/11—**|**30)**<br>||
|Investment‐to‐output ratioI/Y|_(7)_||0.215||
|Public investment‐to‐output ratioI<sup>�</sup>/Y|_(7)_||0.086||
|Private investment‐to‐output ratioI<sup>�</sup>/Y|_(7)_||0.129||
|Human capital growthg�|_(8)_||0.010||
|TFP growthg�|_(9)_||0.014||
|Population growth rateg�|_(10)_|||0.016|
|Working age‐to‐population share, growthg�|_(10)_|||0.006|
|Labor force participation rate, growthg�|_(11)_||0.000||

- *Multiply by 100 to obtain parameter/variable values in percent share or growth terms (%). Note (source and calculation):

- _(1)_ Penn World Tables (PWT) 9: share of labor compensation in GDP at current national prices. There is no data for Syria. As a proxy, we use the 2010 average for four relatively conflict‐free middle‐income MENA economies (Djibouti, Jordan, Morocco and Tunisia).

- _(2)_ δ is PWT 8.1 data for Syria. δ<sup>�</sup> is the PWT 9 depreciation rate for non‐residential structures.

- _(3)_ δ<sup>�</sup> is derived as the residual from a weighted average calculation of δ based on δ<sup>�</sup> and K<sup>�</sup> ⁄K _. (4)_ Calibrated value based on long‐term averages of investment‐to‐output, GDP growth and the aggregate capital depreciation rate. See the discussion in Section 2.2.1.

- _(5)_ Calibrated based on average shares for lower‐middle income countries and oil‐based economies. See the discussion in Section 2.2.1.

- _(6)_ K��⁄Y� and K��⁄Y� are derived by applying K<sup>�</sup> ⁄ K to K�/Y� . _(7)_ Gross fixed capital formation (% of GDP), average for 1998‐2007 from WDI. Public investment share assumed at 40% based on World Bank (2017b) and IMF (2010).

- _(8)_ PWT 9: index of human capital per person based on years of schooling (Cohen and Soto 2007; Cohen and Leker 2014) and returns to education (Psacharopoulos 1994).  Average growth rate, 2001‐2010.

- _(9)_ The Conference Board (2017)/our own estimates using Kim and Loayza (2019). Average growth rate, 2001‐2010.

- _(10)_ United Nations (2011). _(11)_ Zero growth is assumed based on the stabilizing/marginally increasing participation rate observed in the 2013 ILO‐modelled estimates and projections.

# _2.2.3  Lower and upper estimates of projections_

Lower and upper estimates are set based on adjustments to some of the projected variables in panel C of Table 1. Table 2 displays these calibrations – which are those projections that are different from the central projections in panel C of Table 1.

10