A 2024 forecast is especially pessimistic about China’s fertility prospects, according to a new NBER working paper by Seth G. Benzell, Laurence J. Kotlikoff, and Victor Yifan Ye. The paper says that both projections point to substantial global aging and a major global capital glut, which would push long-run real capital returns to very low levels.

The latest forecast implies global GDP in 2100 would be 10% lower and payroll tax rates would be much higher to finance old-age benefits. The authors say the most important implication is a major shift in economic hegemony: China’s share of global GDP in 2100 would fall from 25.6% to 14.9%, while the U.S. share would rise from 11.2% to 14.4%. In other words, the paper frames demographic change as a driver not just of slower growth, but also of a different balance of economic weight among the world’s largest economies.

The results are highly sensitive to assumptions. If the U.S. eliminated all future immigration, its projected 14.4% share of global 2100 GDP would decline to 9.2%. If global fertility followed the UN’s low variant, 2100 world output would be one third lower rather than one tenth lower.

The paper also says the level and distribution of global output are highly sensitive to the speed at which AI expands frontier technologies. It defines Accelerated AU/AI as 4x faster-than-recent growth in capital’s share through 2050, and Transformative AU/AI as 10x faster capital-share growth. The authors say either scenario would reinforce demographic forces and secure long-run U.S. economic hegemony, underscoring that technology assumptions can materially alter long-run GDP shares in the model.

Under Transformative AI combined with 2024 demographics, the paper says the U.S. and China would account for 25.3% and 16.9% of global GDP in 2100, respectively.

The paper notes that today the U.S. share of global GDP is slightly higher than it was in 1980.