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Modelling the world economy at the 2050 horizon

Author

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  • Jean Fouré

    (CEPII - Centre d'Etudes Prospectives et d'Informations Internationales - Centre d'analyse stratégique)

  • Agnès Bénassy-Quéré

    (CEPII - Centre d'Etudes Prospectives et d'Informations Internationales - Centre d'analyse stratégique, PSE - Paris School of Economics - ENPC - École des Ponts ParisTech - ENS Paris - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique - EHESS - École des hautes études en sciences sociales - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique)

  • Lionel Fontagné

    (CEPII - Centre d'Etudes Prospectives et d'Informations Internationales - Centre d'analyse stratégique, PSE - Paris School of Economics - ENPC - École des Ponts ParisTech - ENS Paris - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique - EHESS - École des hautes études en sciences sociales - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique, Department of Economics - EUI - European University Institute)

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.

Suggested Citation

  • Jean Fouré & Agnès Bénassy-Quéré & Lionel Fontagné, 2013. "Modelling the world economy at the 2050 horizon," PSE - Labex "OSE-Ouvrir la Science Economique" hal-00975545, HAL.
  • Handle: RePEc:hal:pseose:hal-00975545
    DOI: 10.1111/ecot.12023
    Note: View the original document on HAL open archive server: https://hal.archives-ouvertes.fr/hal-00975545
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    Cited by:

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    2. Bekkers, Eddy & Koopman, Robert B. & Rêgo, Carolina Lemos, 2021. "Structural change in the Chinese economy and changing trade relations with the world," China Economic Review, Elsevier, vol. 65(C).
    3. Fouré, Jean & Guimbard, Houssein & Monjon, Stéphanie, 2016. "Border carbon adjustment and trade retaliation: What would be the cost for the European Union?," Energy Economics, Elsevier, vol. 54(C), pages 349-362.
    4. Jean Chateau & Lionel Fontagné & Jean Fouré & Åsa Johansson & Eduardo Olaberría, 2015. "Trade patterns in the 2060 world economy," OECD Journal: Economic Studies, OECD Publishing, vol. 2015(1), pages 67-100.
    5. Agnès Bénassy-Quéré, 2015. "The euro as an international currency," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-01144371, HAL.
    6. Decreux, Yvan & Fontagnã‰, Lionel, 2015. "What Next for Multilateral Trade Talks? Quantifying the Role of Negotiation Modalities," World Trade Review, Cambridge University Press, vol. 14(1), pages 29-43, January.
    7. Anne-Célia Disdier & Charlotte Emlinger & Jean Fouré, 2015. "Atlantic versus Pacific Agreement in Agri-food Sectors: Does the Winner Take it All?," PSE - G-MOND WORKING PAPERS halshs-01190840, HAL.
    8. Christophe Gouel & Houssein Guimbard, 2018. "Nutrition Transition and the Structure of Global Food Demand," Post-Print hal-01820555, HAL.
    9. Baldos, Uris Lantz & Thomas Hertel, 2014. "Bursting the Bubble: A Long Run Perspective on Crop Commodity Prices," GTAP Working Papers 4574, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University.
    10. Bekkers, Eddy, 2019. "Challenges to the trade system: The potential impact of changes in future trade policy," Journal of Policy Modeling, Elsevier, vol. 41(3), pages 489-506.
    11. Ahmed,Syud Amer & Baris,Enis & Go,Delfin Sia & Lofgren,Hans & Osorio-Rodarte,Israel & Thierfelder,Karen E. & Ahmed,Syud Amer & Baris,Enis & Go,Delfin Sia & Lofgren,Hans & Osorio-Rodarte,Israel & Thier, 2017. "Assessing the global economic and poverty effects of antimicrobial resistance," Policy Research Working Paper Series 8133, The World Bank.
    12. Lionel Fontagné & Cecilia Bellora, 2019. "Shooting oneself in the foot? US trade policy coping with Global Value Chains," Post-Print hal-02128135, HAL.
    13. Jean Fouré & Houssein Guimbard & Stéphanie Monjon, 2013. "Border Carbon Ajustment in Europe and Trade Retaliation: What would be the Cost for European Union?," Working Papers 2013-34, CEPII research center.
    14. Agnès Bénassy-Quéré, 2015. "The euro as an international currency," PSE-Ecole d'économie de Paris (Postprint) hal-01299083, HAL.
    15. Lennox, James & Parrado, Ramiro, 2015. "Capital-embodied Technologies in CGE Models," Climate Change and Sustainable Development 196998, Fondazione Eni Enrico Mattei (FEEM).
    16. 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.
    17. Cecilia Bellora & Lionel Fontagné, 2019. "Shooting Oneself in the Foot? Trade War and Global Value Chains," Working Papers 2019-18, CEPII research center.
    18. Jean-Christophe Bureau & Houssein Guimbard & Sébastien Jean, 2016. "Competing Liberalizations: Tariffs and Trade in the 21st Century," Working Papers 2016-12, CEPII research center.
    19. Hoa-Thi-Minh Nguyen & Huong Do & Adrian Kay & Tom Kompas, 2020. "Rice policy in a transitional economy: balancing the social and political objectives," Food Security: The Science, Sociology and Economics of Food Production and Access to Food, Springer;The International Society for Plant Pathology, vol. 12(3), pages 549-566, June.
    20. Gros, Daniel & Alcidi, Cinzia, 2014. "The Global Economy in 2030: Trends and Strategies for Europe," CEPS Papers 9142, Centre for European Policy Studies.

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    Keywords

    GDP projections; long run; global economy;
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