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Modelling the world economy at the 2050 horizon

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  • Jean Fouré
  • Agnès Bénassy-Quéré
  • Lionel Fontagné

Abstract

Economic analysis is increasingly addressing long-term issues (such as global warming) that require a dynamic baseline for the world economy. In this article, we develop a three-factor (capital, energy, labour) macroeconometric (MaGE - Macroeconometrics of the Global Economy) model, and project growth for 147 countries to 2050. We improve on the literature by the following: (i) accounting for the energy constraint through dynamic modelling of energy productivity, (ii) modelling female participation rates consistent with education catch-up, (iii) departing from the assumptions of either a closed economy or full capital mobility (by applying a Feldstein-Horioka type relationship between saving and investment rates), and (iv) offering a fully consistent treatment of the Balassa-Samuelson effect. These innovative features have a sizeable impact on projected GDP.

(This abstract was borrowed from another version of this item.)

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Bibliographic Info

Article provided by The European Bank for Reconstruction and Development in its journal Economics of Transition.

Volume (Year): 21 (2013)
Issue (Month): 4 (October)
Pages: 617-654

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Handle: RePEc:bla:etrans:v:21:y:2013:i:4:p:617-654

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Cited by:
  1. Fouré, Jean & Guimbard, Houssein & Monjon, Stéphanie, 2013. "Border Carbon Ajustment in Europe and Trade Retaliation: What would be the Cost for European Union?," Economics Papers from University Paris Dauphine 123456789/13008, Paris Dauphine University.
  2. Lionel Fontagné & Jean Fouré & Maria Priscila Ramos, 2013. "MIRAGE-e: A General Equilibrium Long-term Path of the World Economy," Working Papers 2013-39, CEPII research center.

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