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The Long View: Scenarios for the World Economy to 2060

Yvan Guillemette and David Turner

No 22, OECD Economic Policy Papers from OECD Publishing

Abstract: This paper presents long-run economic projections for 46 countries, extending the short-run projections of the Spring 2018 OECD Economic Outlook. It first sets out a baseline scenario under the assumption that countries do not carry out institutional and policy reforms. This scenario is then used as a reference point to illustrate the potential impact of structural reforms in alternative scenarios, including better governance and educational attainment in the large emerging-market economies and competition-friendly product market and labour market reforms in OECD economies. Flexibility-enhancing labour market reforms not only boost living standards but, by raising the employment rate, also help alleviate fiscal pressures associated with population ageing. Another scenario illustrates the potential positive impact of linking the pensionable age to life expectancy on the participation rate of older workers, and in particular that of women. Additional scenarios illustrate the potential economic gains from raising public investment and spending more on research and development. A final ‘negative’ scenario shows how slipping back on trade liberalisation – returning to 1990 average tariff rates – might depress standards of living everywhere.

Keywords: conditional convergence; fiscal sustainability; governance reform; labour market reform; long-term growth; long-term projection; retirement age (search for similar items in EconPapers)
JEL-codes: E6 H68 J11 O4 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-age, nep-lab and nep-mac
Date: 2018-07-12
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