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Potential Output In The Czech Republic: A Production Function Approach

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Author Info
Jaromír Hurník
David Navrátil

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Abstract

This paper deals with the Czech economy supply side performance from the macroeconomic point of view. In order to evaluate the supply side behaviour we calculate the potential output dynamic path and contribution of its particular determinants using the production function method. The results show that the potential output growth was rather slow around 2 per cent. This implies that e. g. even 3 per cent growth can cause macroeconomic imbalances. Increase of the non-accelerating-inflation-rate of unemployment (NAIRU), weak growth of the capital stock and weak growth of total factor productivity appear to be the reasons for the constrained ability of the Czech economy to grow steadily and converge to EU level.

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Publisher Info
Article provided by University of Economics, Prague in its journal Prague Economic Papers.

Volume (Year): 2005 (2005)
Issue (Month): 3 ()
Pages: 253-266
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Handle: RePEc:prg:jnlpep:v:2005:y:2005:i:3:id:265:p:253-266

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Related research
Keywords: total factor productivity; production function; potential output; NAIRU; capital stock;

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Find related papers by JEL classification:
E23 - Macroeconomics and Monetary Economics - - Macroeconomics: Consumption, Saving, Production, Employment, and Investment - - - Production
O47 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Measurement of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

  1. Pete Richardson & Laurence Boone & Claude Giorno & Mara Meacci & David Rae & David Turner, 2000. "The Concept, Policy Use and Measurement of Structural Unemployment: Estimating a Time Varying NAIRU Across 21 OECD Countries," OECD Economics Department Working Papers 250, OECD, Economics Department. [Downloadable!]
  2. Claude Giorno & Pete Richardson & Wim Suyker, 1995. "Technical Progress, Factor Productivity and Macroeconomic Performance in the Medium Term," OECD Economics Department Working Papers 157, OECD, Economics Department. [Downloadable!]
  3. Robert J. Barro, 1998. "Notes on Growth Accounting," NBER Working Papers 6654, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  4. Nauro F. Campos & Fabrizio Coricelli, 2002. "Growth in Transition: What We Know, What We Don't, and What We Should," William Davidson Institute Working Papers Series 470, William Davidson Institute at the University of Michigan Stephen M. Ross Business School. [Downloadable!]
    Other versions:
  5. Fabio Scacciavillani & Phillip Swagel, 1999. "Measures of Potential Output - An Application to Israel," IMF Working Papers 99/96, International Monetary Fund.
  6. Rebecca L Driver & Jennifer V Greenslade & Richard G Pierse, . "The role of expectations in estimates of the NAIRU in the United States and the United Kingdom," Bank of England working papers 180, Bank of England. [Downloadable!]
  7. Jiří Jaroš, 2002. "Growth Accounting In Transitive Economies," Prague Economic Papers, University of Economics, Prague, vol. 2002(2). [Downloadable!] (restricted)
  8. Lubomír Lízal, 1999. "Depreciation Rates in a Transition Economy: Evidence from Czech Panel Data," Prague Economic Papers, University of Economics, Prague, vol. 1999(3). [Downloadable!] (restricted)
    Other versions:
  9. George A. Akerlof & William T. Dickens & George L. Perry, 2000. "Near-Rational Wage and Price Setting and the Long-Run Phillips Curve," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 31(2000-1), pages 1-60. [Downloadable!]
  10. Jennifer V Greenslade & Richard G Pierse & Jumana Saleheen, . "A Kalman filter approach to estimating the UK NAIRU," Bank of England working papers 179, Bank of England. [Downloadable!]
  11. Gali, Jordi & Gertler, Mark, 1999. "Inflation dynamics: A structural econometric analysis," Journal of Monetary Economics, Elsevier, vol. 44(2), pages 195-222, October. [Downloadable!] (restricted)
    Other versions:
  12. Claude Giorno & Pete Richardson & Deborah Roseveare & Paul van den Noord, 1995. "Estimating Potential Output, Output Gaps and Structural Budget Balances," OECD Economics Department Working Papers 152, OECD, Economics Department. [Downloadable!]
  13. Franz, Wolfgang, 2003. "Will the (German) NAIRU Please Stand up?," ZEW Discussion Papers 03-35, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research. [Downloadable!]
  14. Fuhrer, Jeff & Moore, George, 1995. "Inflation Persistence," The Quarterly Journal of Economics, MIT Press, vol. 110(1), pages 127-59, February. [Downloadable!] (restricted)
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  15. Calvo, Guillermo A., 1983. "Staggered prices in a utility-maximizing framework," Journal of Monetary Economics, Elsevier, vol. 12(3), pages 383-398, September. [Downloadable!] (restricted)
  16. Jørgen Elmeskov, 1993. "High and Persistent Unemployment: Assessment of the Problem and Its Causes," OECD Economics Department Working Papers 132, OECD, Economics Department. [Downloadable!]
  17. Vladimir Bezdek & Kamil Dybczak & Ales Krejdl, 2003. "Czech Fiscal Policy: Introductory Analysis," Working Papers 2003/07, Czech National Bank, Research Department. [Downloadable!]
  18. Romer, Paul M, 1990. "Endogenous Technological Change," Journal of Political Economy, University of Chicago Press, vol. 98(5), pages S71-102, October. [Downloadable!] (restricted)
    Other versions:
  19. Robert J. Gordon, 1997. "The Time-Varying NAIRU and its Implications for Economic Policy," NBER Working Papers 5735, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
Full references

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Alena Bicakova & Kamil Dybczak & Ales Krejdl & Jiri Slacalek & Michal Slavik, 2007. "CNB Economic Research Bulletin: Fiscal policy and its sustainability," Occasional Publications - Edited Volumes, Czech National Bank, Research Department, edition 2, volume 5, number rb05/2 edited by Ian Babetskii & Vladimir Bezdek. [Downloadable!]
  2. Dana Hajkova, 2008. "The Measurement of Capital Services in the Czech Republic," Working Papers 2008/11, Czech National Bank, Research Department. [Downloadable!]
  3. Ian Babetskii & Ales Bulir & Fabrizio Coricelli & Jan Filacek & Michal Franta & Roman Horvath & Branislav Saxa & Katerina Smidkova, 2008. "CNB Economic Research Bulletin: Ten years of inflation targeting," Occasional Publications - Edited Volumes, Czech National Bank, Research Department, edition 1, volume 6, number rb06/1 edited by Ian Babetskii & Katerina Smidkova. [Downloadable!]
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