Long-run growth and demographic prospects in advanced economies

Galo Nuño Barrau, Cristina Pulido () and Ruben Segura-Cayuela ()
Additional contact information
Cristina Pulido: Banco de España

No 1206, Occasional Papers from Banco de España

Abstract: This paper analyses the long-run growth rates of advanced economies, based on demographic factors. To this end, growth is broken down into two components: growth in productivity (GDP per working-age person) and the projected rate of growth of the working-age population. Productivity is assumed to grow in the long-run at a constant rate equal to that of the technology leader, whereas the demographic projections are those of the United Nations. This simple methodology abstracts from other factors normally considered in the literature on long-term growth, such as the convergence process (we focus on advanced economies) and heterogeneity in participation and employment rates. However, the results do not differ much from those obtained using these other approaches (which are richer, but also more speculative), although the growth rates turn out to be somewhat lower in most cases. They indicate a general deceleration of growth in advanced economies in the coming two decades, due to a slowdown in working-age population growth. Japan, Germany, Italy and Spain face the least favourable growth dynamics in our sample, as these countries face reductions in the size of their workforces. By 2050 France and the United Kingdom could have overtaken Germany to become the largest economies in Europe. In the case of Spain (whose working-age population is expected to peak in 2024) the growth rate of GDP will progressively decline to just below 2% over the following decade.

Keywords: Advanced economies; demography; convergence; endogenous growth. (search for similar items in EconPapers)
JEL-codes: E20 O40 O50 (search for similar items in EconPapers)
Pages: 30 pages
Date: 2012-07
New Economics Papers: this item is included in nep-age, nep-dem and nep-eec
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.bde.es/f/webbde/SES/Secciones/Publicaci ... /12/Fich/do1206e.pdf First version, July 2012 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bde:opaper:1206

Access Statistics for this paper

More papers in Occasional Papers from Banco de España Contact information at EDIRC.
Bibliographic data for series maintained by Ángel Rodríguez. Electronic Dissemination of Information Unit. Research Department. Banco de España ().