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Estimating Potential Output in Romania using a Structural VAR

Author

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  • Stoica Tiberiu

    () (The Bucharest Academy of Economic Studies)

Abstract

This paper estimates the potential output in Romania using seven structural VAR models. During the period of economic boom the potential GDP growth in Romania was around 6.5 %. The severe economic crisis that started in the last quarter of 2008 generated a significant reduction of the potential output. The potential economic growth dropped at around -2.8 % during the steep contraction of the economy in 2009 and at 1 % in 2010, according to the model estimates. The economic crisis changed significantly the potential growth in Romania due to the structural changes that affected the country. Labor input as well as capital accumulation negatively affected the potential output during the crisis. As regarding the crisis effects on total factor productivity (TFP) in Romania, the connection is uncertain.

Suggested Citation

  • Stoica Tiberiu, 2011. "Estimating Potential Output in Romania using a Structural VAR," Ovidius University Annals, Economic Sciences Series, Ovidius University of Constantza, Faculty of Economic Sciences, vol. 0(2), pages 1203-1207, May.
  • Handle: RePEc:ovi:oviste:v:xi:y:2011:i:9:p:1203-1207
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    More about this item

    Keywords

    potential output; Structural VAR; crisis; structural break.;

    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; State Space Models
    • E01 - Macroeconomics and Monetary Economics - - General - - - Measurement and Data on National Income and Product Accounts and Wealth; Environmental Accounts
    • E29 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Other
    • E39 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Other
    • E66 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - General Outlook and Conditions

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