Uncertainty in forecasts of long-run economic growth

P. Christensen, K. Gillingham, W. Nordhaus

Research output: Contribution to journalArticlepeer-review

Abstract

Forecasts of long-run economic growth are critical inputs into policy decisions being made today on the economy and the environment. Despite its importance, there is a sparse literature on long-run forecasts of economic growth and the uncertainty in such forecasts. This study presents comprehensive probabilistic long-run projections of global and regional per-capita economic growth rates, comparing estimates from an expert survey and a low-frequency econometric approach. Our primary results suggest a median 2010–2100 global growth rate in per-capita gross domestic product of 2.1% per year, with a standard deviation (SD) of 1.1 percentage points, indicating substantially higher uncertainty than is implied in existing forecasts. The larger range of growth rates implies a greater likelihood of extreme climate change outcomes than is currently assumed and has important implications for social insurance programs in the United States.

Original languageEnglish (US)
Pages (from-to)5409-5414
Number of pages6
JournalProceedings of the National Academy of Sciences of the United States of America
Volume115
Issue number21
DOIs
StatePublished - May 22 2018

Keywords

  • Climate change
  • Economic productivity
  • Forecast uncertainty
  • Greenhouse gas emissions
  • Long-run growth

ASJC Scopus subject areas

  • General

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