Understanding and applying long-term GDP projections

Paul Hubbard, Dhruv Sharma
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We project gross domestic product (GDP) for 140 world economies from 2020 to 2050 based on United Nation’s demographic projections, the International Monetary Fund’s GDP statistics and estimates of potential labour productivity derived from the World Economic Forum’s Global Competitiveness Index (GCI) and a methodology published by the Australian Treasury. We review the conceptual framework underpinning this model, and identify its core assumptions. Finally, we highlight potential applications for this model, including: considering the dispersion of global economic activity; assessing the potential scale of activity across different trading blocs; and quantifying the impact of domestic policy reform scenarios in individual economies. Rather than provide an exhaustive analysis of the results, we make the data and results freely available.

The views expressed in this paper represent the views of the authors and not those of the Australian Treasury.