The production function methodology for calculating potential growth rates and output gaps
AbstractSummary for non-specialistsAs a result of the financial crisis, cyclically corrected indicators have taken on a greater degree of significance and are firmly back at the forefront of economic policy making. This heightened level of policy interest not only reflects the anxiousness of policy makers to avoid the well-documented mistakes made in assessing the supply side impact of historical crises but is also linked with the primary role of such indicators in calculating cyclically adjusted budget balances & in designing successful "exit strategies" from the current crisis (and especially the requirement to unwind the large increases in EU public debt).
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Bibliographic InfoPaper provided by Directorate General Economic and Monetary Affairs (DG ECFIN), European Commission in its series European Economy - Economic Papers with number 420.
Length: 108 pages
Date of creation: Jul 2010
Date of revision:
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More information through EDIRC
Macro-economic coordination fiscal policy and public finances structural policies growth and jobs stability and convergence programmes excessive deficit procedure Production function methodology potential growth output gaps;
Find related papers by JEL classification:
- C10 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - General
- E60 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - General
- O10 - Economic Development, Technological Change, and Growth - - Economic Development - - - General
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-08-28 (All new papers)
- NEP-CBA-2010-08-28 (Central Banking)
- NEP-EFF-2010-08-28 (Efficiency & Productivity)
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