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[China's output gap estimates (1985-2009) and comparison of the two estimation methods]


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  • Liu, Fei
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In this paper, we used the production function method and the Van Norden method to estimate China's output gap (and potential output) from 1985 to 2009 year,and comparise the two methods. The results showed that: (1) the results of different methods are basically consistent with our economic situation. (2) Chinese economic stability enhanced after the emergence of sharp fluctuations, so development of domestic demand is the only way to stabilize the economy. (3) the results estimated by the Van Norden are more sensitive than PF method's . (4) From 2000, the potential output of China has increased.

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Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 38785.

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Date of creation: 05 Mar 2011
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Handle: RePEc:pra:mprapa:38785

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Keywords: Potential output; output gap; the production function method; Van Norden method;

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  1. Simon van Norden, 1995. "Why Is It So Hard to Measure the Current Output Gap?," Macroeconomics, EconWPA 9506001, EconWPA.
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