PARM	Correlation	Explanation		Justification
5.4	.8		Regional E/GNP		Similar transmission	
5,6	.8		feedback elasticities	mechanisms in all regions,
						but magnitude of response
						is uncertain.

7,8	.9		Regional income		Similar transmission mechanism, 
7,9	.7		elasticities		Middle East may be less
						similar due to dominance of
						oil production in the economy.

31,32	.9		Regional productivity	Engine of growth hypothesis,
						growth linked via capital,
						knowledge flows.

12,31	.9		Labor and energy	Increase in basic knowledge
			productivity		is the driving force and
						affects all factors equally.			

31,60	.6		Labor productivity	Increase in basic knowledge
31,68	.6		and technological	is the driving force and
31,74	.6		change in energy	affects labor productivity
			production		and energy production
						technologies similarly.

31,69	.9		Labor productivity	Higher income/capita places
31,73	.9		and environmental	higher demands for clean
			costs			environment.

61,62	.6		Regional environmental	Similar regulations may be
			costs for coal		adopted internationally.

The data selection approximates these correlations within a tolerance limit and additional correlations are implied by the primary correlations specified here. See Appendix C for actual correlations under both the assumption of zero correlation and the correlation targets given here.