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Abstract

The recent 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. We adapt a standard global economic model to estimate the implications of the global and regional population forecast errors suggested by this study, via their demographic and income effects, for the performance of the global economy and the composition of global food demand. The model is “GTAP-Dyn”, a recursively dynamic, applied general equilibrium model of the world economy (Ianchovichina and McDougall, 2000). The results indicate that slower than forecast population (and hence labour force) growth causes slower growth in Australia’s overall economy and in its agricultural, food and minerals sectors in particular. When the population growth slowdown is restricted to developing countries, the overall effects on Australia are smaller but there is a substantial reallocation of resources away from agriculture, food production and other natural resource based industries in favour of manufactures.

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