Chapter 4 - Sources of growth in the world economy: a comparison of G7 and E7 economies

Abstract

This chapter analyzes the economic performance of seven emerging (E7) economies—China, India, Indonesia, Brazil, Mexico, Turkey, and South Korea, in comparison with the G7 economies, examining their sources of growth and catch-up performance during 2000–17 and projecting their growth in the succeeding decade, 2017–27. The findings include: (i) E7 has far surpassed G7 in the share of world gross domestic product (GDP) and contribution to world economic growth, with China and India outperforming the United States on the latter measure; (ii) capital accumulation exceeds total factor productivity (TFP) as a source of growth during 2000–17 for E7 and G7; (iii) All E7 economies, except for Mexico, progressed on catching up with the United States during 2000–17, while all G7 economies, except for Japan, were lagging; and (iv) in 2027, China, the United States, India, and Japan will remain the four largest economies, while Indonesia will overtake Germany and Turkey will surpass France and Italy in GDP size.