Construction and Analysis of a Global GDP Growth Model for 185 Countries through 2050

Abstract

This article presents the construction and analysis of a long-run GDP growth model, including sample results, its sensitivity to parameter choices, and explanations of the concepts underpinning it. It is designed to be flexible so that scholars can use it with their own assumptions and parameter choices to customize results. The model estimates GDP as a function of labor force, capital stock, and total factor productivity (TFP) for 185 countries through 2050 under alternate scenarios. It provides rough estimates for real exchange rates, poverty indices, median and percentile incomes and consumption levels, and the populations of the lower, middle, and upper income classes. The model also provides additional evidence for the TFP convergence phenomenon and the effect of the state failure on TFP growth. It can further be used to model stocks, accessibility, and investment requirements for 10 infrastructure sectors. The model can yield counterfactual estimates and actual and roughly estimated comparable historical data for most of the projected series, provided in identical units. For 126 countries, such series (e.g., TFP) are provided back through 1956, and for some even earlier.