Abstract:The TG Matrix proposed here shows how economic and social variables interact in the process of development. It can be described as a general equilibrium methodology that allows us to see as precisely as possible how economic and social variables affect one another at a certain moment or stage of development. Economic growth affects social variables and the environment, but the environment and social variables affect each other and also affect economic growth. And there are indirect effects: the environment impacts on health, which in turn reacts back on economic growth. Using the matrix of these interactions we can then analyze how such effects play out over a course of prolonged interaction. This also shows how and to what extent economic relations are embedded in the larger society; and it can be used to analyze and suggest policy to influence the changes in the way the economy and the rest of society relate to each other in the course of development. In particular, development traps can be identified and policies to avoid them suggested.