Long-standing historical dynamics suggest a slow-growth, high-inequality economic future

Matthew Burgess, Ryan E. Langendorf, Jonathan D. Moyer, Ashley Dancer, Barry B. Hughes and David Tilman

No q4uc6, SocArXiv from Center for Open Science

Abstract: Long-run economic growth is deeply uncertain, but will profoundly affect societal scale, well-being, and challenges. Statistical forecasts, expert opinions, and socioeconomic scenarios from integrated assessment models (IAMs) project an order-of-magnitude range of 2100 global GDP per capita values, with an even wider range for today’s developing countries. Definitive multidecadal predictions are impossible, but here we show that a long-standing historical relationship between GDP per capita growth and GDP per capita is most consistent with 21st-century scenarios projecting relatively slow economic growth and high inequality, though still projecting rising affluence in all regions. We show that a simple differential equation-based model that empirically fits this relationship to a Kuznets curve would have, since 1980, consistently projected a 21st-century economic future similar to the Shared Socioeconomic Pathway (SSP) scenario SSP4. Moreover, we show that the Kuznets model’s projections from 1980 onwards would have consistently outperformed short-term IMF forecasts for the 2010s, except in low-income regions, where both tend to over-project growth. We show that a complex empirically grounded IAM (International Futures, IFs) produces nearly identical 21st-century GDP per capita projections as the Kuznets model. Compared to the SSP scenarios, the IFs model projects a 21st century with relatively high poverty and population growth, and moderate energy demands and GHG emissions.

Date: 2022-04-23
New Economics Papers: this item is included in nep-gro and nep-his
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Persistent link: https://EconPapers.repec.org/RePEc:osf:socarx:q4uc6

DOI: 10.31219/osf.io/q4uc6

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