A General Equilibrium Long-term path of the Word Economy

LIONEL FONTAGNÉ; JEAN FOURÉ; MARIA PRISCILA RAMOS

Ginebra

Conferencia; 15th Annual Conference on Global Economic Analysis; 2012

Thinking of how the relative sizes of countries and how the geography of world productionand trade will be affected in the long run must be based on sound economic reasoning aboutthe determinants of long term growth. It must also be embedded in a general equilibriumframework that takes account of the interactions among markets and sectors, as well asbetween countries. This paper takes stock of a three phase research project. The first stepconsists of deriving and estimating a three-factor (labor, capital, energy) macroeconomicgrowth model for a large set of individual countries, which ts two forms of technologicalprogress (standard TFP and energy efficiency). The second step consists of providing withthe sectoral detail with a Computable General Equilibrium model of the world economy calibrated to these projections. In a third step we compare this baseline with two alternative scenarios on our main assumptions.