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Uncertainty in forecasts of long-run economic growth.

ABSTRACT: Forecasts of long-run economic growth are critical inputs into policy decisions being made today on the economy and the environment. Despite its importance, there is a sparse literature on long-run forecasts of economic growth and the uncertainty in such forecasts. This study presents comprehensive probabilistic long-run projections of global and regional per-capita economic growth rates, comparing estimates from an expert survey and a low-frequency econometric approach. Our primary results suggest a median 2010-2100 global growth rate in per-capita gross domestic product of 2.1% per year, with a standard deviation (SD) of 1.1 percentage points, indicating substantially higher uncertainty than is implied in existing forecasts. The larger range of growth rates implies a greater likelihood of extreme climate change outcomes than is currently assumed and has important implications for social insurance programs in the United States.

SUBMITTER: Christensen P

PROVIDER: S-EPMC6003472 | biostudies-literature | 2018 May

REPOSITORIES: biostudies-literature

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Uncertainty in forecasts of long-run economic growth.

Christensen P P Gillingham K K Nordhaus W W

Proceedings of the National Academy of Sciences of the United States of America 20180514 21

Forecasts of long-run economic growth are critical inputs into policy decisions being made today on the economy and the environment. Despite its importance, there is a sparse literature on long-run forecasts of economic growth and the uncertainty in such forecasts. This study presents comprehensive probabilistic long-run projections of global and regional per-capita economic growth rates, comparing estimates from an expert survey and a low-frequency econometric approach. Our primary results sugg ...[more]

PMID: 29760089

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