Projecting Global Growth - The Conference Board.pdfVIP

Projecting Global Growth by Vivian Chen, Ben Cheng, Gad Levanon, Ataman Ozyildirim and Bart van Ark This version: November 2012 The Conference Board, Economics Working Papers, EPWP #12 – 02 Abstract This paper presents the methodology for The Conference Board Global Economic Outlook 2013, including projections for 11 major regions and individual estimates for 33 mature and 22 emerging market economies for 2013, 2014—2018, and 2019–2025. The projections are based on a supply-side based growth accounting model that estimates the contributions of the use of labor, capital, and productivity to the growth of GDP. Capital and productivity growth are estimated on the basis of a wide range of related variables during past periods. The trend growth rates that are obtained from this exercise are adjusted for possible deviations between actual and potential output. 1 1. Introduction and Summary Since 2008, The Conference Board publishes an annual global economic outlook, projecting GDP growth for 55 countries using growth accounting techniques. The basis of the framework is formed by the work of Dale Jorgenson and colleagues, including Jorgenson, Ho and Stiroh (2005) and Jorgenson and Vu (2008). Over the years we have aimed to improve the projection methods, using more information from historical performance and adopting procedures to adjust for cyclical deviations from trend in short term. This paper describes the methodology and sources underlying the projections of growth of Gross Domestic Product in the 2013 edition of The Conference Board Global Economic Outlook. It is an expanded version of the methods implemented in the 2012 edition of the outlook, especially by basing the methodology more strongly on variables that have an established economic significance for the projected variables.1 The p