Long-term projections of the world economy

This paper surveys long-term projections of global GDP per capita and presents the authors' own projections through 2050 using a multicountry-multisector general equilibrium model (G-Cubed). Studies generally agree that global GDP per capita growth will continue to slow in the coming decades, driven by several global challenges such as rapid population aging, slower technological progress (in pre-AI projections), weaker capital investment, and stagnating educational attainment. Projections tend to be consistent for advanced economies but vary considerably for developing regions, highlighting the importance of alternative methodologies and assumptions, as well as inherent long-term uncertainty. While existing studies rely on neoclassical models with an aggregate production sector, the G-Cubed model takes a disaggregated approach to projecting productivity and output that accounts for dynamic interactions between sectors and across economies. The authors' projections incorporate the impacts of three fundamental factors: productivity growth, population aging, and climate change. Productivity growth in advanced economies is expected to slow, but AI could counteract the decline and serve as an engine for sustained growth. Population aging in most advanced economies will continue to constrain labor supply, potentially reducing GDP per capita through changes in age structure. Climate change poses challenges to economic growth through multiple channels, with moderate quantitative impacts by midcentury. The extent to which developing regions can boost productivity, leverage demographic advantages, and navigate climate change will depend on policy choices as well as governance and institutional improvements. Finally, the paper discusses the implications of geopolitical fragmentation, government debt, and public infrastructure on economic growth.