 Long-term growth and productivity projections in advanced countriesRémy Lecat, Gilbert Cette and Carole Ly-Marin Post-Print from HAL Abstract: In this period of high uncertainty about future economic growth, we have developed a growth projection tool for 13 advanced countries and the euro area at the 2100 horizon. This high uncertainty is reflected in the debate on the possibility of a "secular stagnation", fueled by the short-lived Information and Communication Technology (ICT) shock and the current low productivity and GDP growth in advanced countries. Our projection tool allows for the modelling of technology shocks, for different speeds of regulation and education convergence, with endogenous capital growth and TFP convergence processes. We illustrate the benefits of this tool through four growth scenarios, crossing the cases of a new technology shock or secular stagnation with those of regulation and education convergence or of absence of reforms. Over the period 2015-2100, the secular stagnation scenario assumes yearly TFP growth of 0.6% in the US, leading to a 1.5% GDP growth trend. The technology shock scenario assumes that the third technological revolution will, in the US, provide similar TFP gains to electricity during the second industrial revolution, leading to a 1.4% TFP trend, to which we add a TFP growth wave peaking in 2040, and thus to an average GDP growth rate of 3%. In non-US countries, GDP growth will depend on the implementation of regulation reforms, the increase in education and on the distance to the country-specific convergence target, namely the US, as well. Over the period 2015-2060, for the euro area, Japan and the United Kingdom, benefits from regulation and education convergence would amount to a 0.1 to 0.4 pp yearly growth rate depending on the initial degree both of rigidity and the TFP distance to the US. JEL classification: O11, O33, O43, O47, O57 Keywords: Growth, productivity, long-term projections, structural reforms, innovation, education Keywords: Growth; productivity; long-term projections; structural reforms; innovation; education (search for similar items in EconPapers) Published in OECD Journal: Economic Studies, 2017, 2016 (1), pp.71 - 90. ⟨10.1787/eco_studies-2016-5jg1g6g5hwzs⟩ There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it. Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-01724616 DOI: 10.1787/eco_studies-2016-5jg1g6g5hwzs Access Statistics for this paper More papers in Post-Print from HAL |
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