12/07/2018 - Policy choices made today can have important positive effects on future living standards, according to new long-term economic scenarios released by the OECD.
The Long View: Scenarios for the World Economy to 2060 extends the usual short-run horizon of economic forecasters to better illustrate the potential benefits of reforms to education, governance, labour market policies and product market regulations, whose effects play out over decades. In a “business-as-usual” reference scenario without significant reforms, living standards (GDP per capita) in the OECD countries improve by between 1½ and 2% per annum over the coming 40 years. Living standards in the BRIICS countries (Brazil, Russia, India, Indonesia, China and South Africa) grow faster, but decelerate from the 6% annual growth achieved over the last decade to just over 2% by 2060, leaving them at less than half the level seen in the leading countries.
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A number of alternative scenarios illustrate how policy and institutional reforms could boost future living standards, making use of previous OECD work that quantifies the impact of structural reforms. Lessons from alternative scenarios include:
Finally, in a negative scenario, the paper shows how slipping back on trade liberalisation – returning to 1990 average import tariffs – depresses long-run living standards by 14% for the world as a whole and anywhere from 15-25% in the most affected countries.
Further information on The Long View: Scenarios for the World Economy to 2060, is available at: http://www.oecd.org/economy/growth/scenarios-for-the-world-economy-to-2060.htm.
Media should contact Lawrence Speer (+33 1 4524 7970) in the OECD Media Office.
Working with over 100 countries, the OECD is a global policy forum that promotes policies to improve the economic and social well-being of people around the world.
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