US Will Be the World's Third Largest Economy: Citi

[OhioChick]

Published: Friday, 25 Feb 2011 | 4:19 AM ET

The world is going to become richer and richer as developing economies play catch up over the coming years, according to Willem Buiter, chief economist at Citigroup.

"We expect strong growth in the world economy until 2050, with average real GDP growth rates of 4.6 percent per annum until 2030 and 3.8 percent per annum between 2030 and 2050," Buiter wrote in a market research.

"As a result, world GDP should rise in real PPP-adjusted terms from $72 trillion in 2010 to $380 trillion dollars in 2050," he wrote.

As the world watches oil prices rise sharply amid unrest in the Middle East, Buiter's analysis of the world's long-term prospects offer some hope that better times are ahead but if he is right power will shift from the West to the East very quickly.

More: http://www.cnbc.com/id/41775174

Snip~ ""China should overtake the US to become the largest economy in the world by 2020, then be overtaken by India by 2050," he predicted."

[Davis_X_Machina]

1. Insofar as...

...this happens as a result of some of the most impoverished people in the world having their lives improved from desperate to grim, this cannot be accounted a bad thing.

It's not how big the US economy is compared to other economies, it's how it divides up its burdens and its rewards that counts.

[provis99]

4. I agree.It's a good thing.

It doesn't necessarily mean the US is getting poorer; it means poor countries with large populations are getting wealthier, which is a good thing.

[Newest Reality]

2. Gee, that's magically happening on its very own, Citigroup.

American workers? Ah, so 20th Century and not really all that necessary.

American consumption? It is nice to profit from them, but look at those juicy markets growing like mushrooms over there.

Multinational flexibility. Hello 3rd-World. We are being eviscerated and the vultures are just cleaning the carcass.

[closeupready]

3. I'm not convinced.

n/t

[bemildred]

5. Babble. nt

[BobbyBoring]

6. And this surprises who??

China and India have grown on the backs of the American worker. It's just that simple and I doubt it will be 2020. More like 2015 the way we're going.

Think about it. Nearly all call centers for banks are now offshore. Nearly all our medical records are transcribed off shore.

The reason the USA was top dog for so long is we had lots of people working.

Crazy old world~

[bhikkhu]

7. 4.6% for 40 years? He's insane...

Economic growth has always built upon a foundation of resources and energy. There is no energy or resource which is expected to grow at that rate, in fact, there is hardly an energy supply or resource which is expected to grow at all. Current levels are only being sustained by heroic efforts, and the unsustainability of the whole mess is becoming increasingly apparent. This is the kind of baseless economic conjecturing we had in '98, as we were entering the age of "perpetual prosperity", or in June '08 when they speculated that oil prices really didn't matter any more and the global economy looked recession-proof.

For anyone interested in working out the figures, 1% annual growth gives you a doubling in about 70 years. 2% growth, a doubling in about 35 years, and 4% growth doubles every 17 years. So what he is saying is that economic will double by 2028, and quadruple by 2045. That is, in 35 years the economy (and presumably the infrastructure and material goods it describes) will be four times the size of what we have today. As said - the guy is insane, or a complete idiot.

[westerebus]

8. A complete idiot.

But a well compensated complete idiot.

[BobTheSubgenius]

11. You're exactly right.

Lack of sustainability makes almost any optimistic view of long-term growth more hope than prediction. There are just too many constraints, firmly anchored in the finite nature of resources and environment. Until God gives us an ocean of abiotic oil, of course.

Also...Rule of 72. Nice! :)

[Fearless]

9. This really doesn't matter if we keep a sound economic strategy

Of course we won't.

[bhikkhu]

10. "Beijing air quality is beyond measurable"

http://alttransport.com/2011/02/u-s-says-beijing-air-pollution-is-beyond-measurable/

...anyone should try to go breath the air before getting all bent about how they snatched the "prize" and are in first place now.