A Long-run Macroeconomic Model of the Austrian Economy (A-LMM 2.0). New Results (2024)

We use the updated version of the Austrian Long-run Macroeconomic Model (A-LMM 2.0) for a long-term projection of the Austrian economy until 2075. Our baseline scenario is the input for microsimulation models of the Austrian pension insurance system. A-LMM 2.0 is a neoclassical growth model using demographic indicators to determine TFPgrowth, the savings and the inflation rate. The model replicates stylised facts about growing market economies with an ageing population. The current model update incorporates the recent population forecast, information from labour market and national accounts data. Compared to the previous report we expect slightly higher labour market participation rates, lower output growth; inflation converges to the ECB-target value.