The Great Shift: Macroeconomic Projections for the World Economy at the 2050 Horizon

CEPII Working Paper No. 2012-3

104 Pages Posted: 15 Feb 2012

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: February 10, 2012

Abstract

We present growth scenarios for 147 countries to 2050, based on MaGE (Macroeconometrics of the Global Economy), a three-factor production function that includes capital, labour and energy. We improve on the literature by accounting for the energy constraint through dynamic modelling of energy productivity, and departing from the assumptions of either a closed economy or full capital mobility by applying a Feldstein-Horioka-type relationship between savings and investment rates. Our results suggest that, accounting for relative price variations, China could account for 33% of the world economy in 2050, which would be much more than the United States (9%), India (8%), the European Union (12%) and Japan (5%). They suggest also that China would overtake the United States around 2020 (2040 at constant relative prices). However, in terms of standards of living, measured through GDP per capita in purchasing power parity, China would still lag 10 percent behind the United States at the 2050 horizon.

Keywords: GDP projections, long run, global economy

JEL Classification: E23, E27, F02, F47

Suggested Citation

Foure, Jean and Benassy-Quere, Agnes and Fontagne, Lionel, The Great Shift: Macroeconomic Projections for the World Economy at the 2050 Horizon (February 10, 2012). CEPII Working Paper No. 2012-3, Available at SSRN: https://ssrn.com/abstract=2004332 or http://dx.doi.org/10.2139/ssrn.2004332

Jean Foure (Contact Author)

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

9 rue Georges Pitard
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Agnes Benassy-Quere

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

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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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