Thursday, November 15, 2012

Long Term Economic Forecasts

This long term forecast from the OECD must of course be taken with a grain of salt. It suggests that the countries which now compose the OECD (the rich countries) which now produce more then 3/5th of the world's goods and services, will see their product drop to about half the world total by 2030, and to just over 2/5th by 2060 -- of course due to assumed differences of the rates of growth of rich and less rich nations. (Of course, more countries may join the OECD in the interim.)

The projection suggests that Japan (JPN) will become less important in the world economy as compared with China (CHN) and India (IND). The United States, currently the world's largest economy, is projected to wind up smaller than that of the huge Asian nations. It is projected to remain producing a major portion of the OECD nations' goods and services.

There are of course a couple of inferences that can be drawn from even such a rough estimate. One is that it is important for the United States to follow pro-growth policies, for other countries will certainly try to do so. Another is that policies designed for the last half century should surely be rethought: people now alive will be around in 2060.

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