GDP Prediction (two papers)

This model is a semi-empirical one and expresses the future GDP as a function of only one parameter - population of some specific single year of age.

1.     GDP growth rate and population (Abstract, Draft paper)

Abstract

Real GDP growth rate in developed countries is found to be a sum of two terms. The first term is the reciprocal value of the duration of the period of mean income growth with work experience, T_cr. The current value of T_cr in the USA is 40 years. The second term is inherently related to population and defined by the relative change in the number of people with a specific age (9 years in the USA),

(1/2)*dN9(t) /N9(t)

where N9(t) is  the number of 9-year-olds at time t. The T_cr grows as the square root of real GDP per capita.

Hence, evolution of real GDP is defined by only one parameter - the number of people of the specific age. Predictions for the USA, the UK, and France are presented and discussed.

A similar relationship is derived for real GDP per capita. Annual increment of GDP per capita is also a combination of economic trend term and the same specific age population term. The economic trend term during last 55 years is equal to $400 (2002 US dollars) divided by the attained level of real GDP per capita. Thus, the economic trend term has an asymptotic value of zero.

Inversion of the measured GDP values is used to recover the corresponding change of the specific age population between 1955 and 2003. The population recovery method based on GDP potentially is of a higher accuracy than routine censuses.

 

2.     GDP per capita and economic trend (Abstract, Draft paper)

Abstract

Growth rate of real GDP per capita is represented as a sum of two components – a monotonically decreasing economic trend and fluctuations related to a specific age population change. The economic trend is modeled by an inverse function of real GDP per capita with a numerator potentially constant for the largest developed economies. Statistical analysis of 19 selected OECD countries for the period between 1950 and 2004 shows a very weak linear trend in the annual GDP per capita increment for the largest economies: the USA, Japan, France, Italy, and Spain. The UK, Australia, and Canada show a larger positive linear trend. The fluctuations around the trend values are characterized by a quasi-normal distribution with potentially Levy distribution for far tails. Developing countries demonstrate the increment values far below the mean increment for the most developed economies. This indicates an underperformance in spite of large relative growth rates.