The PRICI Foundation · Transmission Economics
Why doesn’t capital reach
where policy sends it?
Stimulus, quantitative easing and investment incentives often fail to turn into productive investment and wage growth. The PRICI Foundation researches why — and builds open, public-data tools to measure it.
The Observation
Capital tends to follow the path of least resistance.
Economic policy usually assumes that capital flows to where returns are highest. In practice, a growing body of evidence suggests it often flows to where it meets the least friction — which is not always where it does the most good.
That helps explain some long-running puzzles: why large monetary stimulus has lifted asset prices more than productive investment, why the same stimulus has very different effects in different sectors, and why productivity growth has been slow even when capital is plentiful.
Our Approach
A different question for policy
Transmission Economics complements existing economic traditions rather than replacing them. It adds one question that is rarely measured.
How much capital is in the system?
How much stimulus is needed, how much fiscal space exists, how should demand be managed.
How efficiently does it flow?
Where capital gets held up — by process, opacity, market structure or extraction — and what it would take to reduce that friction before adding more.
We call that friction systemic impedance. Our working hypothesis is that it can be measured, and that measuring it can make policy more effective. How the framework works.
The Tools
Measurement, built from public data
Each tool uses published information — company accounts and official statistics — so results can be checked and reproduced by anyone.
PRICI
An index of how companies balance pricing, shareholder payouts and productive investment relative to their sector peers.
PRICI-Lite
A version for periods of stagnation, focused on investment rather than pricing.
PRICI-P
Adapts the approach for public bodies, looking at how much spending reaches frontline delivery.
Macro-Impedance Audit
Brings sector and public-sector scores together into an overall picture for policymakers.
Where We Are
Published, and ready to be tested
The theory, the tool specifications, worked examples and draft policy language are written up and available to read or on request.
A modelled scenario for Spain and a comparison of two UK retailers show how the approach works in practice. They are illustrations, not proof.
A back-test against 25–30 past stimulus events to see whether measured friction really predicts how well stimulus works. We are looking for partners to help.
“The phenomenon is not on trial. The instrument is — and instruments can always be improved.”
Our work has been submitted as evidence to parliamentary committees, regulators and international bodies, including the UK House of Commons Business and Trade Committee. Read our written evidence.
Questions
Start where it makes sense for you
FAQ by the Public
What this means for wages, pensions and prices, in plain English.
FAQ by Policymakers
How it could be piloted, and the questions officials usually ask.
FAQ by Academics
Identification, measurement and how the work could be falsified.
Get Involved
There are several ways to help
Work with us
Researchers, officials and institutions interested in testing, piloting or critiquing the framework.
Contribute your expertise
Economists, data scientists, policy analysts and communicators — there is real work to do.
Join the board
We are building an independent board with expertise in economics, policy, law and governance.
Fund the work
Donations support open research, free tools and the back-testing programme.
The PRICI Foundation CIC · Community Interest Company registered in England & Wales, No. 16980702