Output Gaps in European Monetary Union. New Insights from Input Augmentation in the Technological Progress
AbstractOutput gaps for ten European countries and the USA are estimated based on a CES production function with input augmentation in the technological progress. The substitution parameter is estimated from the coefficients of the labor and capital demand functions. The estimation is done using Johansen's cointegration method. For six of the eleven countries analyzed, the use of the Cobb Douglas form would not be appropriate. The output gaps show a similar cyclical pattern for all countries. They remain mostly within +/-3% for five countries and within +/-5% for another four. Separating labor- and capital-augmenting technological progress gives insight into the driving forces of growth.
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Bibliographic InfoPaper provided by Institute for Advanced Studies in its series Economics Series with number 102.
Length: 28 pages
Date of creation: Jul 2001
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Find related papers by JEL classification:
- C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
- E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
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