Potential output estimates for Central and East European countries using production function method
AbstractIn the paper potential output of four Central and East European countries is estimated using the Cobb-Douglas production function. Estonian production function uses data of employment, sectoral restructuring, estimated capital stock and foreign direct investments. Capital stock and level of technology are estimated for the Central and East European countries using the same form of production function and parameter estimates of Estonian economy. Potential output is calculated using the long-term unemployment to approximate potential labour input in the production. According to the estimates potential output is higher than actual in all the countries during most of the period, except in the fast economic growth periods (in the Czech Republic in 1995-1996, Estonia in 1997-1998 and Latvia in 1997, respectively).
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Bibliographic InfoPaper provided by Bank of Estonia in its series Bank of Estonia Working Papers with number 2001-2.
Date of creation: 13 Oct 2001
Date of revision: 13 Oct 2001
Postal: Estonia bld. 13, 15095 Tallinn, ESTONIA
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