The Utilization-Adjusted Output Gap: Is the Russian Economy Overheating?
AbstractThis paper estimates the output gap in Russia using a utilization-adjusted production function approach, which we argue is preferable to traditional output gap methods. The approach amounts to (1) using available surveys to estimate the "natural rates" of capacity and labor utilization above which inflation begins to accelerate; (2) estimating a production function with utilization-adjusted capital and labor inputs; and (3) defining potential output as the level of output obtained when both capital and labor are at their estimated natural rates. The results suggest that the output gap in Russia was negative between 1999 and 2003, but may have recently become positive, thus contributing to inflationary pressures.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by International Monetary Fund in its series IMF Working Papers with number 06/68.
Date of creation: 01 Mar 2006
Date of revision:
Contact details of provider:
Postal: International Monetary Fund, Washington, DC USA
Phone: (202) 623-7000
Fax: (202) 623-4661
Web page: http://www.imf.org/external/pubind.htm
More information through EDIRC
This paper has been announced in the following NEP Reports:
- NEP-ALL-2006-08-05 (All new papers)
- NEP-CIS-2006-08-05 (Confederation of Independent States)
- NEP-MAC-2006-08-05 (Macroeconomics)
- NEP-TRA-2006-08-05 (Transition Economics)
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.:
- Yuri Andrienko & Sergei Guriev, 2003.
"Determinants of interregional mobility in Russia: evidence from panel data,"
w0027, Center for Economic and Financial Research (CEFIR).
- Andrienko, Yuri & Guriev, Sergei, 2003. "Determinants of Interregional Mobility in Russia: Evidence from Panel Data," CEPR Discussion Papers 3835, C.E.P.R. Discussion Papers.
- Yuri Andrienko & Sergei Guriev, 2003. "Determinants of Interregional Mobility in Russia: Evidence from Panel Data," William Davidson Institute Working Papers Series 551, William Davidson Institute at the University of Michigan.
- Franziska Ohnsorge & Nienke Oomes, 2005.
"Money Demand and Inflation in Dollarized Economies: The Case of Russia,"
IMF Working Papers
05/144, International Monetary Fund.
- Oomes, Nienke & Ohnsorge, Franziska, 2005. "Money demand and inflation in dollarized economies: The case of Russia," Journal of Comparative Economics, Elsevier, vol. 33(3), pages 462-483, September.
- Goohoon Kwon & Antonio Spilimbergo, 2005.
"Russia's Regions: Income Volatility, Labor Mobility and Fiscal Policy,"
IMF Working Papers
05/185, International Monetary Fund.
- Kwon, Goohoon & Spilimbergo, Antonio, 2005. "Russia's Regions: Income Volatility, Labour Mobility and Fiscal Policy," CEPR Discussion Papers 5265, C.E.P.R. Discussion Papers.
- Kenneth M. Emery & Chih-Ping Chang, 1997. "Is there a stable relationship between capacity utilization and inflation?," Economic and Financial Policy Review, Federal Reserve Bank of Dallas, issue Q I, pages 14-20.
- Bils, Mark & Cho, Jang-Ok, 1994.
"Cyclical factor utilization,"
Journal of Monetary Economics,
Elsevier, vol. 33(2), pages 319-354, April.
- Mark Bils & Jang-Ok Cho, 1993. "Cyclical factor utilization," Discussion Paper / Institute for Empirical Macroeconomics 79, Federal Reserve Bank of Minneapolis.
- Greenwood, Jeremy & Hercowitz, Zvi & Huffman, Gregory W, 1988. "Investment, Capacity Utilization, and the Real Business Cycle," American Economic Review, American Economic Association, vol. 78(3), pages 402-17, June.
- Andreas Billmeier, 2004. "Ghostbusting: Which Output Gap Measure Really Matters?," IMF Working Papers 04/146, International Monetary Fund.
- Burnside, Craig & Eichenbaum, Martin, 1996.
"Factor-Hoarding and the Propagation of Business-Cycle Shocks,"
American Economic Review,
American Economic Association, vol. 86(5), pages 1154-74, December.
- Craig Burnside & Martin Eichenbaum, 1994. "Factor Hoarding and the Propagation of Business Cycles Shocks," NBER Working Papers 4675, National Bureau of Economic Research, Inc.
- Douglas Staiger & James H. Stock & Mark W. Watson, 1997. "The NAIRU, Unemployment and Monetary Policy," Journal of Economic Perspectives, American Economic Association, vol. 11(1), pages 33-49, Winter.
- Niek Nahuis, 2003. "An alternative demand indicator: the 'non-accelerating inflation rate of capacity utilization'," Applied Economics, Taylor and Francis Journals, vol. 35(11), pages 1339-1344.
- Norman Morin & John Stevens, 2004. "Estimating capacity utilization from survey data," Finance and Economics Discussion Series 2004-49, Board of Governors of the Federal Reserve System (U.S.).
- Lawrence J. Christiano & Terry J. Fitzgerald, 1999.
"The Band Pass Filter,"
NBER Working Papers
7257, National Bureau of Economic Research, Inc.
- Baxter, Marianne & Farr, Dorsey D., 2005. "Variable capital utilization and international business cycles," Journal of International Economics, Elsevier, vol. 65(2), pages 335-347, March.
- Carol Corrado & Joe Mattey, 1997. "Capacity Utilization," Journal of Economic Perspectives, American Economic Association, vol. 11(1), pages 151-167, Winter.
- Norman Morin & John J Stevens, 2005.
"Diverging Measures of Capacity Utilization: An Explanation,"
Palgrave Macmillan, vol. 40(4), pages 46-54, October.
- Norman Morin & John J. Stevens, 2004. "Diverging measures of capacity utilization: an explanation," Finance and Economics Discussion Series 2004-58, Board of Governors of the Federal Reserve System (U.S.).
- Irina Dolinskaya & Irina Tytell, 2001. "Explaining Russia's Output Collapse: Aggregate Sources and Regional Evidence," IMF Working Papers 01/16, International Monetary Fund.
- Michaelides, Panayotis & Milios, John, 2009. "TFP change, output gap and inflation in the Russian Federation (1994-2006)," Journal of Economics and Business, Elsevier, vol. 61(4), pages 339-352, July.
- Aleksejs Meļihovs & Anna Zasova, 2009.
"Assessment of the natural rate of unemployment and capacity utilisation in Latvia,"
Baltic Journal of Economics,
Baltic International Centre for Economic Policy Studies, vol. 9(2), pages 25-46, December.
- Aleksejs Melihovs & Anna Zasova, 2009. "The Assessment of Natural Rate of Unemployment and Capacity Utilisation in Latvia," Working Papers 2009/02, Latvijas Banka.
- Antonio Spilimbergo, 2005.
"Measuring the Performance of Fiscal Policy in Russia,"
IMF Working Papers
05/241, International Monetary Fund.
- Antonio Spilimbergo, 2007. "Measuring the Performance of Fiscal Policy in Russia," Emerging Markets Finance and Trade, M.E. Sharpe, Inc., vol. 43(6), pages 25-44, November.
- International Monetary Fund, 2010. "Estimates of the Output Gap in Armenia with Applications to Monetary and Fiscal Policy," IMF Working Papers 10/197, International Monetary Fund.
- Voskoboynikov, Ilya B. & Timmer, Marcel, 2013.
"Is Mining Fuelling Long-run Growth in Russia? Industry Productivity Growth Trends since 1995,"
GGDC Research Memorandum
GD-137, Groningen Growth and Development Centre, University of Groningen.
- Timmer , Marcel P. & Voskoboynikov , Ilya B., 2013. "Is mining fuelling long-run growth in Russia? Industry productivity growth trends since 1995," BOFIT Discussion Papers 19/2013, Bank of Finland, Institute for Economies in Transition.
- Eteri Kvintradze, 2010. "Russia's Output Collapse and Recovery: Evidence from the Post-Soviet Transition," IMF Working Papers 10/89, International Monetary Fund.
- Garbis Iradian, 2007. "Rapid Growth in Transition Economies: Growth-Accounting Approach," IMF Working Papers 07/164, International Monetary Fund.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Jim Beardow) or (Hassan Zaidi).
If references are entirely missing, you can add them using this form.