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Long-Run GDP Growth Framework and Scenarios for the World Economy

Author

Listed:
  • Romain Duval

    (OECD)

  • Christine de la Maisonneuve

    (OECD)

Abstract

This paper develops and applies a simple “conditional growth” framework to make long-term GDP projections for the world economy, taking as a starting point recent empirical evidence about the importance of total factor productivity and human capital in explaining current cross-country disparities in GDP per capita levels. Other distinct features of the projection framework include human capital projections by cohorts and implicit allowance for the impact of ageing and potential labour market and pension reforms on future growth in employment levels. In the baseline projection, world GDP would grow in PPP terms by about 3 ¾ % per year on average over the period 2005-2050. When expressed in constant market exchange rates, taking into account future Balassa-Samuelson effects, this projection falls roughly in the middle of the range of long-run scenarios recently developed in the context of greenhouse gas emission projections. The sensitivity of the projection to total factor productivity and population growth assumptions is significant, however, and compounds with deeper sources of uncertainty such as model and parameter uncertainty. Un cadre d'analyse et des scénarios de long terme pour l'économie mondiale Cet article développe et applique un cadre d’analyse simple fondé sur la « convergence conditionnelle » pour produire des projections de long terme du PIB mondial, prenant pour point de départ l’évidence empirique récente concernant l’importance de la productivité multifactorielle et du capital humain dans l’explication des disparités actuelles de niveaux de PIB par habitant entre pays. Les autres traits distinctifs du cadre d’analyse incluent des projections de capital humain par cohortes, ainsi que la prise en compte implicite de l’impact du vieillissement et des réformes du marché du travail et des régimes de retraite sur la croissance future de l’emploi. Dans la projection centrale, le PIB mondial exprimé en PPA croîtrait à un rythme annuel d’environ 3 ¾ % en moyenne au cours de la période 2006-2050. Exprimé en taux de change de marché constants, en prenant en compte les effets Balassa-Samuelson futurs, cette projection se situe dans le milieu de la fourchette des scénarios de long terme développés récemment dans le contexte des projections d’émissions de gaz à effet de serre. Cependant, la sensibilité de la projection aux hypothèses de taux de croissance de la productivité multifactorielle et de la population est forte, et se combine à des sources d’incertitude plus profondes relatives au modèle et à la valeur des paramètres.

Suggested Citation

  • Romain Duval & Christine de la Maisonneuve, 2009. "Long-Run GDP Growth Framework and Scenarios for the World Economy," OECD Economics Department Working Papers 663, OECD Publishing.
  • Handle: RePEc:oec:ecoaaa:663-en
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    File URL: http://dx.doi.org/10.1787/227205684023
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    Citations

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    Cited by:

    1. Kloudová Jitka & Chwaszcz Ondřej, 2013. "An Analysis of the Creative Potential in Individual Regions of The Czech Republic," Creative and Knowledge Society, De Gruyter Open, vol. 3(1), pages 17-27, July.
    2. Crafts, Nicholas, 2010. "The contribution of new technology to economic growth: lessons from economic history," Revista de Historia Económica, Cambridge University Press, vol. 28(03), pages 409-440, December.
    3. Steve Newbold & Charles Griffiths & Christopher C. Moore & Ann Wolverton & Elizabeth Kopits, 2010. "The "Social Cost of Carbon" Made Simple," NCEE Working Paper Series 201007, National Center for Environmental Economics, U.S. Environmental Protection Agency, revised Aug 2010.
    4. Valentina Bosetti & Carlo Carraro & Enrica De Cian & Romain Duval & Emanuele Massetti & Massimo Tavoni, 2009. "The Incentives to Participate in, and the Stability of, International Climate Coalitions: A Game-theoretic Analysis Using the Witch Model," Working Papers 2009.64, Fondazione Eni Enrico Mattei.
    5. repec:wsi:ccexxx:v:04:y:2013:i:01:n:s2010007813500012 is not listed on IDEAS
    6. Duval, Romain & de la Maisonneuve, Christine, 2010. "Long-run growth scenarios for the world economy," Journal of Policy Modeling, Elsevier, vol. 32(1), pages 64-80, January.

    More about this item

    Keywords

    capital humain; cohortes; cohorts; croissance; growth; human capital; long run; long terme; projections; projections;

    JEL classification:

    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O43 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • O57 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Comparative Studies of Countries
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

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