Potential Growth of the World Economy

29 Pages Posted: 19 Aug 2011 Last revised: 8 May 2014

Dale W. Jorgenson

Harvard University - Department of Economics; National Bureau of Economic Research (NBER); Harvard University - Harvard Kennedy School (HKS)

Khuong M. Vu

National University of Singapore (NUS) - Lee Kuan Yew School of Public Policy

Date Written: August 3, 2010

Abstract

This paper introduces a new framework for projecting potential growth of the world economy, emphasizing the contribution of information technology. We first analyze the sources of economic growth for the world economy, seven regions, and fourteen major economies during four periods- 1989–1995, 1995–2000, 2000–2004, and 2004–2008. The contribution of investment in information technology has increased in all regions, but especially in industrialized economies and Developing Asia. We then project the potential growth rates of labor productivity and GDP for 122 economies over the ten-year period 2009–2019. Relative to historical growth for 1989–2008, we project lower growth rates for productivity and GDP.

Keywords: growth, information technology, investment, productivity

JEL Classification: O47

Suggested Citation

Jorgenson , Dale W. and Vu, Khuong M., Potential Growth of the World Economy (August 3, 2010). Journal of Policy Modeling, Vol. 32, No. 5, 2010 ; Lee Kuan Yew School of Public Policy Research Paper No. PP10-15. Available at SSRN: https://ssrn.com/abstract=1912362

Dale W. Jorgenson

Harvard University - Department of Economics ( email )

Littauer Center
Room 122
Cambridge, MA 02138
United States
617-495-4661 (Phone)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Harvard University - Harvard Kennedy School (HKS) ( email )

79 John F. Kennedy Street
Cambridge, MA 02138
United States

Khuong M. Vu (Contact Author)

National University of Singapore (NUS) - Lee Kuan Yew School of Public Policy ( email )

Singapore 117591
Singapore

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