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Potential Output in the Czech Republic: A Production Function Approach

  • Jaromír Hurník
  • David Navrátil

This paper deals with the Czech economy supply side performance from the macroeconomic point of view. In order to evaluate the supply side behaviour we calculate the potential output dynamic path and contribution of its particular determinants using the production function method. The results show that the potential output growth was rather slow around 2 per cent. This implies that e. g. even 3 per cent growth can cause macroeconomic imbalances. Increase of the non-accelerating-inflation-rate of unemployment (NAIRU), weak growth of the capital stock and weak growth of total factor productivity appear to be the reasons for the constrained ability of the Czech economy to grow steadily and converge to EU level.

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Article provided by University of Economics, Prague in its journal Prague Economic Papers.

Volume (Year): 2005 (2005)
Issue (Month): 3 ()
Pages: 253-266

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Handle: RePEc:prg:jnlpep:v:2005:y:2005:i:3:id:265:p:253-266
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  1. Claude Giorno & Pete Richardson & Deborah Roseveare & Paul van den Noord, 1995. "Estimating Potential Output, Output Gaps and Structural Budget Balances," OECD Economics Department Working Papers 152, OECD Publishing.
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  16. Vladimir Bezdek & Kamil Dybczak & Ales Krejdl, 2003. "Czech Fiscal Policy: Introductory Analysis," Working Papers 2003/07, Czech National Bank, Research Department.
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  20. Fabio Scacciavillani & Phillip Swagel, 1999. "Measures of Potential Output: An Application to Israel," IMF Working Papers 99/96, International Monetary Fund.
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