According to a unique foresight tool of Deutsche Bank Research, by 2020 the four largest economies will be the USA, China, India and Japan when using purchasing power parity exchanges rates to convert GDP data into a common currency. The growth stars will be in Asia: India, Malaysia and China are all set to see GDP growth of more than 5% per annum until 2020. Head of this study was Stefan Bergheim.
Stefan, you explored the growth rates of GDP in 34 countries over the next 14 years. Which will be the four largest economies in 2020? And which economies will grow most quickly?
By 2020 the four largest economies will be the USA, China, India and Japan when using purchasing power parity exchanges rates to convert GDP data into a common currency. The growth stars will be in Asia: India, Malaysia and China are all set to see GDP growth of more than 5% per annum until 2020.
What are key drivers for growth according to your study “Global Growth Centres 2020”?
There are four drivers in our model: population growth, the investment rate, human capital and trade openness. We explored other potential drivers, but either could not find useful time series or there was no statistically significant link to economic growth.
You developed a special methodology for this ongoing research, “Formel-G”, which stands for Foresight Model for Evaluating Long-term Growth. What is special in your approach for predicting the future?
The unique feature of our Formel-G approach is that it combines quantitative and qualitative elements to derive GDP growth rates. We linked modern econometric techniques with innovative trend analysis where we tried to model structural breaks. An interdisciplinary team with economists, a physicist and a sociologist allowed us to include a wide spectrum of methods and of content in the model.
You will be keynote speaker at the 2nd European Futurists Conference Lucerne. What will we learn from you?
I will offer a framework where you will see how many of the things that you work on link to one of the most important topics in political economy: the wealth and poverty of nations. And I will try to show that it is possible and beneficial to explore this topic in an interdisciplinary manner.
Stefan Bergheim is a senior economist at Deutsche Bank Research. He studied economics in Saarbrücken, Germany and for three years in the USA, where he also taught international economics. He has worked for global investment banks and their institutional clients since 1995, covering the German and European economies from Frankfurt.
Since 2002 Stefan works for Deutsche Bank Research, with a focus on demographics, human capital and long-run economic growth. He is the lead analyst in DBR’s ongoing megatopic Global Growth Centres.
His keynote at the 2nd European Futurists Conference, Nov. 23, 2006:
Global Growth Centres 2020