This paper presents the methodology for The Conference Board Global Economic Outlook 2016, including projections for 11 major regions and individual estimates for 33 mature and 32 emerging market economies for 2016, 2016–2020, and 2021–2025. The projections are based on a supply-side growth accounting model that estimates the contributions of the use of factor inputs — labor and capital — and total factor productivity growth to the growth of real GDP. While labor input growth rates are estimated using information on demographic changes and workforce participation rates, capital input and total factor productivity growth are econometrically estimated using a wide range of related variables during past periods. Even though the model is predominantly supply-side based, it also considers demand-side elements, such as savings and socioeconomic variables like life expectancy and educational attainment. To account for the potential impact of trends in globalization on future economic growth, we also incorporate measures of globalization, where exports and imports — two other demand-side indicators — enter as key elements. The trend growth rates that are obtained from this model are adjusted for possible deviations between actual and potential output in the short run.
This working paper is complimentary.