Estimating Potential Output in Developing Countries

This paper describes a parsimonious methodology employed by the World Bank for estimating potential output using the production function method. Despite the necessity of strong assumptions, sensitivity analysis suggests the reported estimates for 159 countries are robust to alternative specification...

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Main Authors:	Burns, Andrew, van Rensburg, Theo Janse, Dybczak, Kamil, Bui, Trung
Format:	Journal Article
Language:	en_US
Published:	Elsevier 2014
Subjects:	Potential GDP Macro econometric model Forecasting Policy analysis
Online Access:	http://hdl.handle.net/10986/20717

id	okr-10986-20717
recordtype	oai_dc
spelling	okr-10986-207172021-04-23T14:03:59Z Estimating Potential Output in Developing Countries Burns, Andrew van Rensburg, Theo Janse Dybczak, Kamil Bui, Trung Potential GDP Macro econometric model Forecasting Policy analysis This paper describes a parsimonious methodology employed by the World Bank for estimating potential output using the production function method. Despite the necessity of strong assumptions, sensitivity analysis suggests the reported estimates for 159 countries are robust to alternative specifications. Moreover, for the majority of countries estimated output gaps are positively correlated with inflation acceleration and negatively correlated with current account balances. An examination of estimated output gaps and post-crisis economic developments in several middle-income countries suggest that the methods can play a useful role in guiding macroeconomic policy. 2014-12-15T22:48:46Z 2014-12-15T22:48:46Z 2014-07 Journal Article Journal of Policy Modeling 0161-8938 http://hdl.handle.net/10986/20717 en_US CC BY-NC-ND 3.0 IGO http://creativecommons.org/licenses/by-nc-nd/3.0/igo World Bank Elsevier Publications & Research :: Journal Article
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	en_US
topic	Potential GDP Macro econometric model Forecasting Policy analysis
spellingShingle	Potential GDP Macro econometric model Forecasting Policy analysis Burns, Andrew van Rensburg, Theo Janse Dybczak, Kamil Bui, Trung Estimating Potential Output in Developing Countries
description	This paper describes a parsimonious methodology employed by the World Bank for estimating potential output using the production function method. Despite the necessity of strong assumptions, sensitivity analysis suggests the reported estimates for 159 countries are robust to alternative specifications. Moreover, for the majority of countries estimated output gaps are positively correlated with inflation acceleration and negatively correlated with current account balances. An examination of estimated output gaps and post-crisis economic developments in several middle-income countries suggest that the methods can play a useful role in guiding macroeconomic policy.
format	Journal Article
author	Burns, Andrew van Rensburg, Theo Janse Dybczak, Kamil Bui, Trung
author_facet	Burns, Andrew van Rensburg, Theo Janse Dybczak, Kamil Bui, Trung
author_sort	Burns, Andrew
title	Estimating Potential Output in Developing Countries
title_short	Estimating Potential Output in Developing Countries
title_full	Estimating Potential Output in Developing Countries
title_fullStr	Estimating Potential Output in Developing Countries
title_full_unstemmed	Estimating Potential Output in Developing Countries
title_sort	estimating potential output in developing countries
publisher	Elsevier
publishDate	2014
url	http://hdl.handle.net/10986/20717
_version_	1764447040433029120

Estimating Potential Output in Developing Countries

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