How large will Canada's GDP be 25years from now? The answer depends on what the rate of growth in GDP will be over that 25-year period. A mathematical formula we can for this caculation is the following:

GDP2038 = GDP2013(1+g)^25

where GDP 2038 is the level of GDP in the year 2038, GDP2013 is the level of GDP in the year 2013, and g is the rate of growth in GDP.

Assume that GDP in 2013 is $1000 million and assume that the value of g is 0.035 (3.5 percent per year). What will be the value of GDP in 2038? Now suppose that the value of g is 0.040 (4.0 percent per year). What will be the value of GDP in 2038 given this slightly larger rate of growth? What does this result say about the importance of policies that promote even slightly faster rates of growth in GDP?