Long-term labour productivity and GDP projections for the EU25 Member States : a production function framework

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Carone, Giuseppe; Denis, Cécile; Mc Morrow, Kieran; Mourre, Gilles; Röger, Werner;
(2006)
  • Subject: Productivity; ageing; long-term projections; production function; labour productivity; older workers
    • jel: jel:J1 | jel:O47 | jel:H55 | jel:D24 | jel:J21 | jel:J26

This paper presents the results of long run labour productivity and GDP growth rate projections (until 2050) for each of the 25 EU Member States and provides a detailed overview of the forecast methodology used. These projections were undertaken in order to provide an i... View more
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    Trend Total Factor Productivity (TFP)..............................................25 Kalman filter generated NAIRU........................................................25 4.2.3. Population of working age.................................................................25 4.2.4. Participation rates ..............................................................................25 4.2.5.

    Capital formation: fixed investment-to-GDP ratio ............................26 4.3.5. Capital formation : transition to the steady state ...............................36 5.

    6.1. Eight scenarios: rationale and construction .....................................................45 Change in labour input assumptions..................................................45 6.1.2. Impact of changing age-structure on productivity.............................46 6.1.4. Productivity convergence in levels rather than in growth rates....................................................................................................48 6.2. Main results of sensitivity tests........................................................................48 6.2.2. The negative effect of a change in the population agestructure is fairly limited....................................................................51 6.2.3. Changing the TFP growth rate assumption could strongly affect the projections..........................................................................53 6.2.4. An assumption of productivity convergence in levels substantially alters the projections for most EU10 countries whilst leaving the EU15 almost unchanged.......................54 ANNEX 1: COUNTRY-SPECIFIC RESULTS ................................................................63 ANNEX 2: EFFECTS OF AGEING ON LONG RUN LABOUR PRODUCTIVITY GROWTH : A THEORETICAL AND EMPIRICAL ASSESSMENT..........................................................................................................78 WHAT IS THE TABLE 1 : OVERVIEW OF LONG RUN EFFECTS OF LABOUR

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