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Potential Output in the Seven Major OECD Countries


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  • Raymond Torres
  • John P. Martin


This paper outlines the concepts and methods used by the OECD Secretariat to derive estimates of potential output and capacity utilisation for the major seven countries. While there are many alternative definitions of potential output, the one which is currently being used by the OECD Secretariat refers to the level of output that is consistent over the medium-term with stable inflation. The paper also contrasts the OECD approach and estimates with those published recently by the IMF. Finally, it presents the results of some INTERLINK simulations designed to illustrate some of the possible effects of faster productivity and potential output growth on macroeconomic performance ... Cet article décrit les concepts et les méthodes utilisés par le Secrétariat de l'OCDE pour estimer le potentiel de production et le taux d'utilisation des capacités des sept grands pays de l'OCDE. Le potentiel de production estimé par le Secrétariat de l'OCDE est défini comme le niveau de production compatible à moyen terme avec une inflation stable, étant entendu qu'il existe beaucoup d'autres défintions possibles. En outre, l'article compare l'approche et les estimations de l'OCDE avec celles que le FMI a publiées récemment. Enfin, quelques effects possibles d'une plus forte croissance de le productivité et du potential de production sont illustrés au moyen de simulations du modèle INTERLINK ...

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Bibliographic Info

Paper provided by OECD Publishing in its series OECD Economics Department Working Papers with number 66.

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Date of creation: May 1989
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Handle: RePEc:oec:ecoaaa:66-en

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Cited by:
  1. Maria Demertzis & Peter van Els & Sybille Grob & Marga Peeters, 2006. "EUROMON: the multi-country model of De Nederlandsche Bank," DNB Occasional Studies, Netherlands Central Bank, Research Department 401, Netherlands Central Bank, Research Department.
  2. repec:cbi:wpaper:5/rt/01 is not listed on IDEAS
  3. Hahn, Franz & Ruenstler, Gerhard, 1996. "Potential Output, the Natural Rate of Unemployment, and the Phillips Curve in a Multivariate Structural Time Series Framework," Economics Series, Institute for Advanced Studies 33, Institute for Advanced Studies.
  4. Demertzis, Maria & Van Els, Peter & Peeters, H.M.M., 2002. "EUROMON: De Nederlandsche Bank's multi-country model," MPRA Paper 29634, University Library of Munich, Germany.
  5. Antonella Palumbo, 2008. "I metodi di stima del PIL potenziale tra fondamenti di Teoria economica e Contenuto empirico," Departmental Working Papers of Economics - University 'Roma Tre', Department of Economics - University Roma Tre 0092, Department of Economics - University Roma Tre.
  6. Döpke, Jörg, 1993. "Alternative Ansätze zur Schätzung des gesamtwirtschaftlichen Produktionspotentials," Kiel Working Papers 591, Kiel Institute for the World Economy.
  7. W. Bolt & P.J.A. van Els, 2000. "Output Gap and Inflation in the EU," DNB Staff Reports (discontinued), Netherlands Central Bank 44, Netherlands Central Bank.
  8. Paul Conway & Ben Hunt, 1997. "Estimating potential output: a semi-structural approach," Reserve Bank of New Zealand Discussion Paper Series G97/9, Reserve Bank of New Zealand.
  9. Stabley W. Black, 2001. "Obtstacles to Faster Growth in Transition Economies," IMF Working Papers, International Monetary Fund 01/37, International Monetary Fund.
  10. Butler, L, 1996. "The Bank of Canada's New Quarterly Porjection Model Part 4 : A Semi- Structural Method to Estimate Potential Output : Combining Economic Theory with a Time-Series Filter," Technical Reports, Bank of Canada 77, Bank of Canada.
  11. Dainis Stikuts, 2003. "Measuring Output Gap in Latvia," Working Papers, Latvijas Banka 2003/02, Latvijas Banka.


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