Global population forecast errors, economic performance and Australian export demand

The analysis of global population forecasts of the past 30 years by the US National Academy of Sciences (Bongaarts and Bulatao, 2000) confirms that errors have been considerable and that population forecasts have generally been upward-biased. Recent stochastic population projections also yield wide error bounds. We adapt a standard global economic model to estimate the implications of global and regional population forecast errors for the performance of the global economy and the composition of Australian export demand. The model is GTAP-Dynamic, a recursively dynamic, applied general equilibrium model of the world economy widely used in the analysis of trade policy. The results indicate that the growth rate of population in the rest of the world is important in Australias economic health. Faster population growth benefits Australias producers of energy, minerals and agricultural products while slower population growth benefits its manufacturing and services sectors at the expense of commodities. The net effect appears to be a gain from faster global population growth