Economy
The Future of International Migration to OECD Countries PDF Print

By OECD, 2010

Scenario 1.  Progress for all

By 2030, the benefits of increased global economic integration and growth are benefiting most nations – even the Less Developed Countries (LDCs). There is strong integration of the global economy, a relatively benign political context and worldwide progress on tackling environmental risks. The EU has enlarged and strengthened as an institution. Strong regional institutions have also emerged in Asia, Africa, the Gulf States and Latin America. Institutional strength has helped to strengthen regional economies, enhance international trade and establish global agreements on the mobility of workers. The ageing of OECD populations, high economic growth and skill shortages across most sectors are key drivers of demand for inward migration. The emergence of regional growth poles encourages increased intra regional migration. The continued globalization of corporations from both the developed and developing world has helped increased the competition for both skilled and unskilled labour in OECD and non-OECD countries. There is a strong circular flow – particularly of professionals and skilled labour between the OECD, BRICs and other developing nations. The attractions of migration are being countered by the increasing range of opportunities in people’s home countries – although the wealth and income gap with the OECD and BRICs remains high. A key feature of the scenario is international co-operation which helps drive globalization, accelerates global trade for most regions and increases the flow of aid from OECD and BRIC countries to other emerging nations and LDCs. Although, the outlook for emerging nations and LDCs improves over the period to 2030, we are unlikely to see a change of “push” factors over the first 10 years.

Scenario 2. OECD Long Boom

This scenario to 2030 presents a view of perpetuation of a 20th century development model where richer countries continue to prosper while developing countries struggle to fulfil their potential. While the OECD countries have been fuelled to new levels of economic prosperity on the back of high investment in technological innovation, the BRIC countries have failed to maintain their stellar growth rates o the late 1990s and early 2000s. Internal barriers such as under-investment have held back BRIC progress, while other developing nations have been pulled along in the slipstream of OECD growth. Institutions such as the EU and OECD have grown and strengthened whilst across the developing world other regional groupings have failed to act as a coherent driver for growth and progress. The demand for in-migration remains high in the OECD, but there is less intense competition from the BRICs.

Scenario 3. Uneven Progress

The OECD countries and BRICs make strong progress and achieve close economic and trade integration. The gap increases with many other developing countries and LDCs who cannot to afford to invest as much in technological innovation, infrastructure, education and health. While there is strong competition for talent between OECD and BRIC nations, there is also a growing supply of skilled and unskilled would-be migrants. The EU has proved an effective driver of growth and in Asia, the ASEAN and Gulf Cooperation Council regional groupings are becoming a coherent economic force. However, the progress of similar groupings in Africa and Latin America continue to falter. There are expected to be increased tensions between cores and peripheries and urban rural areas in developing nations that struggle to achieve advancement. Many of these states show a decreased ability to cope with environmental degradation, water shortages and food stress. All of these factors help drive outward migration. The tension inherent in the wildcard situations is heightened in this scenario such as the potential for more pandemics in countries with limited funding available to implement effective controls. However, this might be mitigated by technological advancements such as health sector discoveries that produce low cost multiple disease vaccinations and low cost solutions that help the energy sector to moderate demand for oil. This scenario could see a rise in reverse migration trends to BRIC economies and migration may even decrease for some OECD countries.

Scenario 4. Globalization Falters

Regular global economic downturns act to depress globalization, growth, infrastructure investment and social development across the world. The EU has either disbanded or become far less effective as an entity. Across the world regional groupings have been considered a lower priority than individual nations’ domestic interests. Whilst the demographic drivers in the OECD mean there is still demand for in-migration in key sectors such as elderly care, the potential supply far exceeds demand. OECD nations in particular use a range of policy instruments to prevent unmanageable in-migration. A growth in illegal migrants would be expected. Pressure for migration increases in a global environment stymied by lower growth, scarcity of critical resources, declining living standards and lower productivity. These pressures would exist in a policy environment hostile to international co-operation, leading to tighter border policies to control migration pressures. Legal and clandestine migration may also be checked by an increase in the cost of migration.

Scenario 5. Decoupled Destinies

The much heralded “decoupling” of developed and developing economies is starting to take place. The OECD countries are beset by a series of increasingly severe and ever more expensive downturns, from which it becomes harder and harder to recover. The credit crisis and resulting downturn of 2008-2012 led to a massive flight of global capital to developing economies and LDCs. These inflows enable developing economies to focus on longer term investment in critical infrastructure, education, healthcare and technological diffusion and have helped provide a massive growth stimulus to many nations. Tensions in the EU mean that it has either weakened or broken up into smaller more local groupings – such as the Scandinavian bloc. In contrast, regional groupings for Asia, Africa, the Gulf States and Latin America have all made considerable progress and have become effective co-coordinators of policy and drivers of growth. Collaboration between these groupings is increasing and frequently by-passes the EU, UN and other “old world” institutions. Economic and social development, coupled with increasing trade amongst developing nations and LDCs have provided new cause for optimism and stimulated reforms in governance and key institutions. Whilst there are limited opportunities for skilled migrants in the OECD, there is now an array of choice for skilled and unskilled labour in both their own countries and across the developing world and LDCs. A virtuous circle develops with greater co-operation, aid and technology transfer flowing between the developing and poorest nations, helping to pull even the weakest states to higher levels of growth and progress. Investment in education, greater female participation in the workplace, higher investment in research and development and increased innovation all spur job creation and create the conditions in which fertility rates can come down. At the same time, in many countries, increased growth provides the funding for investment in clean water, sanitation, pollution control and coastal protection – all of which serve to reduce migration pressure. Overall these factors help to reduce the demand for out-migration and encourage in-migration to developing economies and LDCs. At the same time, firms from the developed world will be increasing their investment in developing markets – further driving the demand for skills and accelerating the inflow of foreign expertise that could help drive technology diffusion, innovation, job creation and wealth generation.

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The 2009 Ageing Report: economic and budgetary projections for the EU-27 Member States (2008-2060) PDF Print
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Directorate-General for Economic and Financial Affairs (DG ECFIN)
Secretariat of the Economic Policy Committee (AWG)
European Commission, 2009

This report provides a description of underlying macroeconomic assumptions and projection methodologies of the age-related expenditure projections for all Member States over the period 2009-2060. On the basis of these underlying assumptions and methodologies, age-related expenditures covering pensions, health care, long-term care, education and unemployment transfers are envisaged to be present to the ECOFIN council in May 2009.

 
Financial Times on Scenarios PDF Print
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Leo Johnson
Finacial Times, 2011

Following the financial crisis and the failed Copenhagen climate summit, three models of growth appear to be battling it out for dominance. The first could be seen as “business as usual”. Its goal is to bring back the boom times and restore growth.The second model is “prosperity without growth”. The goal is to dethrone the obsession with growth, recognise it has social and environmental limits and focus instead on well-being. The third model, emerging as a new orthodoxy, is “green growth”. This involves increasing the productivity of carbon, squeezing it to achieve the same growth from smaller volumes, and lowering emissions. The world can then grow, business as usual, without violating nature’s carbon constraints.

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Global Economics Essay PDF Print

Global Economic Outlook and Strategy, 2011

According to our research, the world is set to become a lot flatter over the next forty years. We expect world trade in constant USD to expand from around $37trn in 2010 to $149trn in 2030 and $371trn in 2050. Along with a sustained expansion of trade, we forecast a marked reorientation of world trade towards EMs in general, and Developing Asia in particular. New trade corridors between and within EMs will come into existence and existing ones will become both deeper and wider. As industrialising EMs become richer, they will import fewer capital goods and commodities and more consumption goods. Exporters of non-renewable natural resources need to diversify their economies to prepare for the eventual depletion of their natural resource end owment, even if that eventuality is still some decades off. Many of the new trade corridors require investment in trade-related infrastructure, including ports, docks, airports, roads, storage facilities, inter-modal freight transport and transshipment facilities. Trade related service industries, including the financing and insurance of trade, transport and tourism, will blossom. The new trade routes have the potential to create new winners, be they products, services, cities, companies, industries, or economies.

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ME-global trade 2050 PDF Print

Citibank, 2011

The Middle East will join emerging Asia and Africa as three of the fastest growing trading regions in the world, as the global economy sees fresh new trade corridors emerge over the next four decades, forecasts Citibank .

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International comparisons of hours worked: an assessment of the statistics PDF Print
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Susan E. Fleck, Bureau of Labor Statistics, May 2009

A study of 13 countries reveals that measures of hours worked based on administrative sources are relatively low while measures based on establishment and labor force surveys are relatively high; thus, although ever improving, these measures cannot yet be taken at face value and are useful only for broad comparisons.

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Economic cycles and their synchronization: Spectral analysis of macroeconomic series from Italy, The Netherlands, and the UK PDF Print
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Lisa Sella, Gianna Vivaldo, Michael Ghil and Andreas Groth, Eurostat, 2012

The present work applies several advanced spectral methods ((Ghil, et al., 2002)) to the analysis of macroeconomic fluctuations in Italy, The Netherlands, and the United Kingdom. These methods provide valuable time-and-frequency-domain tools that complement traditional time-domain analysis, and are thus fairly well known by now in the geosciences and life sciences, but not yet widespread in quantitative economics. In particular, they enable the identification and characterization of nonlinear trends and dominant cycles – including seasonal and multiannual components – that characterize the behavior of each time series. These tools are therewith well adapted to the analysis of short and noisy data, like the macroeconomic time series analyzed herein.

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Tourism Towards 2030 PDF Print
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UNWTO, 2011

International tourist arrivals are forecast to reach 1.8 billion by 2030 according to the newly released UNWTO long-term forecast, Tourism Towards 2030. The report, presented on the occasion of the 19th session of the UNWTO General Assembly, confirms that international tourism will continue to grow in a sustained manner in the next two decades. 

International tourism will continue to grow in the period 2010-2030, but at a more moderate pace than the past decades, with the number of international tourist arrivals worldwide increasing by an average 3.3% a year. As a result, an average 43 million additional international tourists will join the tourism marketplace every year. 

At the projected pace of growth, arrivals will pass the 1 billion mark by 2012, up from 940 million in 2010. By 2030, arrivals are expected to reach 1.8 billion, meaning that in two decades’ time, 5 million people will be crossing international borders for leisure, business or other purposes such as visiting friends and family every day.

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Beyond GDP PDF Print
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European Commission, DG Environment & DG Eurostat, 2007-2010

The Beyond GDP initiative is about developing indicators that are as clear and appealing as GDP, but more inclusive of environmental and social aspects of progress. Economic indicators such as GDP were never designed to be comprehensive measures of prosperity and well-being. We need adequate indicators to address global challenges of the 21st century such as climate change, poverty, resource depletion, health and quality of life.

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The 2009 Ageing Report: economic and budgetary projections for the EU-27 Member States (2008-2060) PDF Print
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Directorate-General for Economic and Financial Affairs (DG ECFIN)
Secretariat of the Economic Policy Committee (AWG)
European Commission, 2009

This report provides a description of underlying macroeconomic assumptions and projection methodologies of the age-related expenditure projections for all Member States over the period 2009-2060. On the basis of these underlying assumptions and methodologies, age-related expenditures covering pensions, health care, long-term care, education and unemployment transfers are envisaged to be present to the ECOFIN council in May 2009.

 
Ageing - Turning the age pyramind on its head (1950-2050) PDF Print
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Dialog – Population Policy Acceptance Study (PPAS)
RTDinfo, Magazine on European Research. EC, 2006.

When are you ‘old’? Nowadays, this is becoming at an increasingly advanced age. The terminology reflects the nuances of a changing reality: ‘active ageing’, senior citizens, the elderly and the very elderly. But whatever the words that are used, Europe is greying and it is a phenomenon that poses major challenges for the public finances (health care, pensions), the economy (shrinking workforce) and, at the human level, for the families and social organisations whose support is so vital in the twilight years. Researchers on the Soccare and Care Work projects are investigating all of these issues.

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The G20 in 2050 PDF Print
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Uri Dadush, Bennett Stancil

International Economic Bulletin, November 2009

The world’s economic balance of power is shifting dramatically. By 2050, the United States and Europe, long the traditional leaders of the global economy, will be joined in economic size by emerging markets in Asia and Latin America. China will become the world’s largest economy in 2032, and grow to be 20 percent larger than the United States by 2050. Over the next forty years, nearly 60 percent of G20 economic growth will come from Brazil, China, India, Russia, and Mexico alone. However, these emerging markets will not rise among the world’s richest countries in per capita terms: their average income in 2050 will still be 40 percent below that of the G7 states today. The end of the decades-old correlation between economic size and per capita income will have profound effects on global economic governance.

The G20 in 2050

 
The world economy in 2025. Macro-Economic Projections and the Role of Asia PDF Print
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Lionel Fontagné
Paris School of Economics (Université Paris 1) and CEPII
From The EU Conference ”The World in 2025”
Brussels, 24 September 2009


The aim of this presentation is foresight how will be the world economy in 2025, this is focused on some macro-economic projections and the role of Asia. The following forecasts are detailed such as demography and world population shares, economic growth and world GDP shares, total consumption and consumption patterns (mirrored by relative prices) and trade and market shares.

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Development and Globalization: Facts and Figures, 2008 PDF Print
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United Nations Conference on Trade and Globalization (UNCTAD)
United Nations 2008

Development and Globalization: Facts and Figures was prepared under the auspices of UNCTAD’s Division on Globalization and Development Strategies, in collaboration with all UNCTAD divisions. In recent years it is remarkable how quick and how fundamental the role of developing economies in the global economy has changed. The biggest and the fastest-growing developing countries nowadays are considered to stabilize the world economy due to their dynamism and their openness. Developing countries accounted for 37 per cent of world merchandise exports in 2006 on a rising trend. Moreover, as many developing countries have achieved current account surpluses they have become important providers of capital for the rest of the world.

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Download this file (UNCATAD.pdf)UNCATAD.pdf[ ]2098 Kb
 
The Global Competitiveness Report 2010–2011 PDF Print
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World Economic Forum, 2010

It is the most comprehensive and authoritative assessment of the comparative strengths and weaknesses of national economies, used by governments, academics and business leaders. The GCR was first published in 1979 and its coverage has expanded each year since, now extending to over 130 major and emerging economies.

 
Assessment of the interaction between economic and physical growth PDF Print
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UCE, Ecofys, University of Utrech, Milieu en Naturr Planbureau, ECN
Netherlands Research Programme on Scientific Assessment and Policy Analysis for Climate Change, 2006

Decoupling between physical and monetary growth of the economy has been identified as one of the key strategies towards sustainable development. The extent to which economic and physical activity are decoupled from each other has important implications for long-term energy and emissions scenario modelling. This assessment project aims therefore at analyzing the relationship between physical activity and economic growth in three economic key sectors, i.e., (i) industry, (ii) transport, and (iii) households and services.

One of the main findings is that the saturation hypothesis holds in specific sectors, but in general does not hold. The saturation hypothesis assumes that with increasing GDP, human activity in physical terms will initially grow on a per capita basis, and then level off to a constant level per capita. We found a levelling-off for some types of human activity, e.g. for steel consumption, cement consumption, and household living area. But in other cases, we rather found a development where the level of human activity continues to grow with GDP growth, e.g. for freight transport, and for the consumption of plastics and paper. It should be mentioned, though, that in most cases we have studied time series of the past 30 to 40 years, and that saturation may occur in the future. This also because there are obvious limitations, such as maximum per capita car ownership or minimum number of persons per household, that in the end will affect the future development of the related activity levels.

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Download this file (economic_physical_modelling.pdf)economic_physical_modelling.pdf[ ]3666 Kb
 
Two paradigms of production and growth PDF Print
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R.Ayres, B.Warr.
INSEAD and Chalmers Institute of Technology, 2001

This article contrasts two incompatible paradigms of economics and their implication for economic growth. The first paradigm is consistent with the micro-foundations of neoclassical theory, which assume that all goods and services are produced from other goods plus value added by some combination of capital and labor. The theory does not explain growth, but simply assumes that technological progress (or multi-factor productivity gains) will continue indefinitely along the supposedly `optimal’ path. Related endogenous growth theory, attempts to explain the so-called Solow residual in terms of spillovers and/or increasing knowledge embodied in `human capital’, but this theory is unquantifiable – lacking satisfactory metrics for knowledge or human capital – and it still neglects the role of energy and materials The second paradigm focuses on the economy as a material resource processor-convertor. It interprets economic growth as an evolutionary process driven mostly by technological innovations (not by capital accumulation), with a strong focus on materials processing and energy (exergy) conversion. We measure resource inputs and resource conversion efficiency in thermodynamic terms. Using a new variable exergy services or ‘useful work’ as a factor of production, historical economic growth in the US since 1900 is reproduced quite accurately. Much of the previously unexplained residual is the result of productive improvements in the efficiency with which useful work is delivered to the economy, the cumulative result of innovation, learning-by-doing and economies of scale.

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Download this file (2003P_Ayres_modelling.pdf)2003P_Ayres_modelling.pdf[ ]838 Kb
 
Malthus’ revenge: the new production consumption patterns PDF Print
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Luc Soete
UNU-MERIT,
Maastricht University
From The EU Conference ”The World in 2025”
Brussels, 24 September 2009

In this paper, the author take inspiration from Thomas Malthus' hypothesis that food shortage and hunger would remain "nature's last most dreadful resource" and that "the power of population is so superior to the power of the earth to produce subsistence for man, that premature death must in some shape or other visit the human race". The author revise and reinterprete it into a modern and thus global version and we elaborate on such a possible new interpretation and what its policy implications might be. In a first section, and somewhat as a parenthesis, the financial crisis is briefly commented as it has unfolded over the last four months of 2008 and impacted gradually the real economy. In the second section of the paper  the different policy responses to past Malthusian challenges are reviewed: how food production succeeded particularly over the second half of the 20th Century to keep pace with rapid population growth. In a third section, the word "population" is replaced in the above cited Malthus' quote with "consumption" and it is illustrated what this might imply for global world growth and Europe's place in the world in 2025. In a fourth and final section, some initial policy conclusions are drawn.

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Macroeconomic implications of demographic developments in the Euro Area PDF Print
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Angela Maddaloni, Alberto Musso, Philipp Rother, Melanie Ward-Warmedinger and Thomas Westermann

European Central Bank, 2006

This paper examines the macroeconomic consequences of future demographic trends for economic growth, financial markets and public finances. It shows that in the absence of reforms and responses by economic agents, the currently projected emographic trends imply a decline in average real GDP growth and a severe burden in terms of pay-as-you-go pension and health care systems. Population ageing will change the financial landscape, with a potentially larger role for financial intermediaries and asset prices. All this points to a need to closely monitor demographic change also from a monetary policy perspective. While population projections are surrounded by considerable uncertainty and the effects of demographic change tend to be drawn out, the magnitude of the potential effects calls for an early recognition of this issue. This paper provides some input to the examination of possible policy issues.

 

 
Ageing, interest rates, and financial flows PDF Print
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Tuomas Saarenheimo
Monetary Policy and Research Department
Bank of Finland Research, 2005

This study concentrates on the effects of ageing on the evolution of global interest rates and financial flows. The study uses a 73-cohort general equilibrium overlapping generations model of five major economic areas (USA, EU-15, Japan, China, and India). Utilising actual population data and UN population projections, the model yields predictions for major economic and financial variables up to 2050.

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