The near-term economic outlook in the United States and Europe is bleak, between the latter's monetary crisis and the fact that the United States won't reach full employment for 11 years and four months if we keep gaining jobs at the rate we did last month.
But if you look a bit further in the future, the outlook becomes much rosier. The OECD has a new report out projecting what countries' economic output, both total and per capita, will be in 2060. Unsurprisingly, the Chinese and Indian economies will have eclipsed the U.S. one, which will remain in third place:
But the per capita numbers are more striking, and encouraging. The report projects that between 2011 and 2060, real GDP per capita will increase sevenfold in India and China. In China, that means a jump from $8,387 in 2011 to almost $60,000 in 2060, in constant 2011 dollars. By contrast, U.S. GDP per capita in 2011 was $48,328.
OECD also projects declining inequality between countries over the next fifty years. The United States will still have a much bigger GDP per capita than China in 2060 — about $136,611, if the OECD is right. But that's a little more than double China's level, whereas today, U.S. GDP per capita is almost six times that of China's.
Generally, the report finds that the income of people in non-OECD countries — that is, countries outside the developed world — shoots up fivefold, and that in OECD countries goes up about 2.7 times. That's good news if you care about equality, and it's extremely good news if you care about eradicating global poverty.
It's worth emphasizing how speculative these judgments are. This is the equivalent of economists in 1962 trying to determine GDP levels in 2010, and it's possible something — like climate change or high oil prices due to increased demand or an asteroid strike — will throw a wrench in this growth path. But the report uses fairly conservative growth projections, and in particular assumes growth in India and China will slow down considerably from its level from 1995 to 2011.
Barring calamity, developing countries are poised to have a great half-century. Global poverty has already been shrinking at hugely promising rates, as Charles Kenny and Laurence Chandy have detailed. And if OECD is right, we could see extreme poverty eliminated in our lifetimes.