Output Gap And Shocks Dynamics. The Case Of Romania
AbstractThis paper evaluates the output gap and the effects of the inflationist shocks to the Romanian economy. We use an extension of the Blanchard-Quah decomposition with three variables: the real output, the unemployment rate and the inflation. Three types of shocks are evaluated: the productivity shocks (on the supply side), the adverse shocks in the labor market and the adverse shocks in the goods and services market (inflationist shocks). The seasonal pattern of the data regarding the quarterly GDP imposes a deseasonalised approach. The analysis of the dynamics of the shocks is confirmed by the real evolutions in the Romanian economy over the period 1994-2003; also a Phillips relationship between inflation and unemployment is emphasized. The conclusions confirmed the relevance of the labor market shocks and the productivity shocks upon unemployment. The equilibrium was reached in about 4 years – as in the case of the output. As regards the productivity shocks, it was found that they did not have relevance on the market of goods and services. (*Paper prepared within the CERGE-EI project RRC IV-057 “Adapted models to estimate potential GDP in the candidate countries”, 2005).
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Bibliographic InfoArticle provided by Institute for Economic Forecasting in its journal Romanian Journal of Economic Forecasting.
Volume (Year): 2 (2005)
Issue (Month): 4 ()
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output-gap; potential GDP; VAR models; Blanchard-Quah decomposition; impulse-response function;
Find related papers by JEL classification:
- C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models &bull Diffusion Processes
- C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation
- P24 - Economic Systems - - Socialist Systems and Transition Economies - - - National Income, Product, and Expenditure; Money; Inflation
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- Petre Caraiani, 2009. "An Estimation of Output Gap in Romanian Economy Using the DSGE Approach," Prague Economic Papers, University of Economics, Prague, vol. 2009(4), pages 366-379.
- Caraiani, Petre, 2008. "An Analysis Of Domestic And External Shocks On Romanian Economy Using A Dsge Model," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 5(3), pages 100-114, September.
- Lucian-Liviu Albu & Vasile Dinu, 2009. "How Deep and How Long Could Be the Recession in Romania," The AMFITEATRU ECONOMIC journal, Academy of Economic Studies - Bucharest, Romania, vol. 11(Number Sp), pages 675-683, November.
- Albu, Lucian Liviu, 2008. "A Model to Estimate the Composite Index of Economic Activity in Romania – IEF-RO," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 5(2), pages 44-50, June.
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