Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/248454 
Year of Publication: 
2021
Series/Report no.: 
BoF Economics Review No. 10/2021
Publisher: 
Bank of Finland, Helsinki
Abstract: 
Population ageing constitutes a central challenge to Finland. Understanding the Finnish economy's likely future trajectory and the key sources of growth is important for the design of policies to counteract these adverse long-term trends. For this purpose, we develop a novel long-run forecast framework based on enodogenous growth theory with human and fixed capital. A central result is a pronounced projected decrease in human capital, substantially weighing on the long-run GDP outlook for Finland. To revert these trends substantial policy efforts are needed. Unless the decline in human capital can be prevented by increasing fertility, skilled immigration, education or employment, even reaching a growth rate of one per cent after the 2040s would require significant measures to increase new fixed capital investments with new technology.
Subjects: 
Forecasting
GDP
Labour productivity
Human capital
Modern growth theory
JEL: 
E17
E24
O11
Persistent Identifier of the first edition: 
Document Type: 
Research Report

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