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Does Using Nairu In The Production Function Influence Estimation Of Potential Output And Output Gap?

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  • Dana Kloudová

    (University of Economics, Prague)

Abstract

Although there are more sophisticated methods of estimation of output gap and potential output, a production function still remains among the most used methods of estimation of these unobservable variables. To gain the most reliable data, several versions of the production function have been developed. This paper analyses if there is some difference between using a version of production with HP filter applied during the estimation and NAIRU. Results will show that there are not very significant differences but because NAIRU can explain changes at the labour market better it will be recommended to use this version of production function.

Suggested Citation

  • Dana Kloudová, 2016. "Does Using Nairu In The Production Function Influence Estimation Of Potential Output And Output Gap?," International Journal of Economic Sciences, International Institute of Social and Economic Sciences, vol. 5(2), pages 1-21, June.
    • Handle: RePEc:sek:jijoes:v:5:y:2016:i:2:p:1-21
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    Cited by:

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    2. Emilian DOBRESCU, 2021. "Potential Output: A Market Conditionalities Interpretation," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 0(4), pages 5-38, December.

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    More about this item

    Keywords

    production function; NAIRU; output gap; potential product;
    All these keywords.

    JEL classification:

    • E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Investment; Capital; Intangible Capital; Capacity
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles

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