Modelling the world economy at the 2050 horizon

Jean Fouré, Agnès Benassy-Quere and Lionel Fontagné

Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) from HAL

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.

Keywords: GDP projections; long run; global economy (search for similar items in EconPapers)
Date: 2013-08-16
Note: View the original document on HAL open archive server: https://hal.science/hal-00975545v1
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Citations: View citations in EconPapers (24)

Published in Economics of Transition, 2013, 21 (4), pp.617-654. ⟨10.1111/ecot.12023⟩

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Journal Article: Modelling the world economy at the 2050 horizon (2013)
Working Paper: Modelling the world economy at the 2050 horizon (2013)
Working Paper: Modelling the world economy at the 2050 horizon (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:cesptp:hal-00975545

DOI: 10.1111/ecot.12023

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