Policy Challenges for the Next 50 Years

This paper identifies and analyses some key challenges that OECD and partner economies mayface over the coming 50 years if underlying global trends relating to growth, trade, inequality andenvironmental pressures prevail. For example, global growth is likely to slow and become increasinglydependent on knowledge and technology, while the economic costs of environmental damages willmount. The rising economic importance of knowledge will tend to raise returns to skills, likely leading tofurther increases in earning inequalities within countries. While increases in pre-tax earnings do notautomatically transform into rising income inequality, the ability of governments to cushion this impactmay be limited, as rising trade integration and consequent rising mobility of tax bases combined withsubstantial fiscal pressures may hamper such efforts. The paper discusses to what extent nationalstructural policies can address these and other interlinked challenges, but also points to the growing needfor international coordination and cooperation to deal with these issues over the coming 50 years.