Modelling the World Economy at the 2050 Horizon

38 Pages Posted: 30 Sep 2013

See all articles by Jean Foure

Jean Foure

Centre d'Etudes Prospectives et d'Info. Internationales (CEPII)

Agnès Bénassy-Quéré

Paris School of Economics (University Paris 1)

Lionel Fontagne

Banque de France; CEPII; University of Paris 1 Panthéon Sorbonne; Paris School of Economics

Date Written: October 2013

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

Suggested Citation

Foure, Jean and Benassy-Quere, Agnes and Fontagne, Lionel, Modelling the World Economy at the 2050 Horizon (October 2013). Economics of Transition, Vol. 21, Issue 4, pp. 617-654, 2013, Available at SSRN: https://ssrn.com/abstract=2332937 or http://dx.doi.org/10.1111/ecot.12023

Jean Foure (Contact Author)

Centre d'Etudes Prospectives et d'Info. Internationales (CEPII) ( email )

9 rue Georges Pitard
Paris Cedex 15, F-75015
France

Agnes Benassy-Quere

Paris School of Economics (University Paris 1) ( email )

106-112 boulevard de l'Hopital
Paris, F-75013
France
+33 1 44 07 82 19 (Phone)

HOME PAGE: http://www.parisschoolofeconomics.com/benassy-quere-agnes/agnesb.html

Lionel Fontagne

Banque de France ( email )

Paris
France

HOME PAGE: http://www.lionel-fontagne.eu/

CEPII ( email )

9 Rue Georges Pitard
Paris, 75015
France
+33 1 53 68 55 06 (Phone)

HOME PAGE: http://lionelfontagne.weebly.com/

Paris School of Economics ( email )

48 Boulevard Jourdan
Paris, 75014 75014
France
+33 1 44 07 89 94 (Phone)

HOME PAGE: http://lionelfontagne.weebly.com/

University of Paris 1 Panthéon Sorbonne ( email )

Maison des Sciences Economiques
106-112 Bd de l'Hôpital
Paris, 75013
France
+33 1 44 07 89 94 (Phone)
+33 1 53 68 55 01 (Fax)

HOME PAGE: http://lionelfontagne.weebly.com/

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