IDEAS home Printed from https://ideas.repec.org/p/bfr/banfra/146.html
   My bibliography  Save this paper

Estimating Potential Output with a Production Function for France, Germany and Italy

Author

Listed:
  • Baghli, M.
  • Cahn, C.
  • Villetelle, J-P.

Abstract

This paper discusses the supply conditions for economic growth in terms of potential GDP estimated by the production function approach for France, Germany and Italy for the 1986:2003 period. The aim of this study is twofold: first, we keep a consistent framework as regards national account institutional sectors. Second, after defining Total Factor Productivity (TFP) in the so-called productive sector from the Solow residual, we specify it in a general framework for the three countries as a function of a time trend corrected for the effects of the age of equipments and the capacity utilisation rate (CUR). This framework allows to distinguish temporal considerations: in the medium to long term, the variables that could generate short to medium term fluctuations in potential output growth are assumed to be stable at a structural level. This implies modifications of the functional specifications related to the time horizon.

Suggested Citation

  • Baghli, M. & Cahn, C. & Villetelle, J-P., 2006. "Estimating Potential Output with a Production Function for France, Germany and Italy," Working papers 146, Banque de France.
    • Handle: RePEc:bfr:banfra:146
    as

    Download full text from publisher

    File URL: https://publications.banque-france.fr/sites/default/files/medias/documents/working-paper_146_2006.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Dave Turner & Pete Richardson & Sylvie Rauffet, 1996. "Modelling the Supply Side of the Seven Major OECD Economies," OECD Economics Department Working Papers 167, OECD Publishing.
    2. Jushan Bai & Pierre Perron, 1998. "Estimating and Testing Linear Models with Multiple Structural Changes," Econometrica, Econometric Society, vol. 66(1), pages 47-78, January.
    3. Gilbert Cette & Daniel Szpiro, 1989. "Une interprétation du ralentissement de la productivité industrielle au moment du second choc pétrolier," Économie et Prévision, Programme National Persée, vol. 87(1), pages 33-42.
    4. Cette, Gilbert & Mairesse, Jacques & Kocoglu, Yusuf, 2005. "ICT diffusion and potential output growth," Economics Letters, Elsevier, vol. 87(2), pages 231-234, May.
    5. Dan Usher, 1980. "The Measurement of Capital," NBER Books, National Bureau of Economic Research, Inc, number ushe80-1, March.
    6. Usher, Dan (ed.), 1980. "The Measurement of Capital," National Bureau of Economic Research Books, University of Chicago Press, number 9780226843001, December.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Christophe Cahn & Arthur Saint-Guilhem, 2010. "Potential output growth in several industrialised countries a comparison," Empirical Economics, Springer, vol. 39(1), pages 139-165, August.
    2. Valter Di Giacinto & Giacinto Micucci & Pasqualino Montanaro, 2010. "Dynamic Macroeconomic Effects of Public Capital: Evidence from Regional Italian Data," Giornale degli Economisti, GDE (Giornale degli Economisti e Annali di Economia), Bocconi University, vol. 69(1), pages 29-66, April.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Depta, Peter & Ravalli, Frank & Harding, Don, 1994. "Extended Measures of Investment and Saving," MPRA Paper 3319, University Library of Munich, Germany.
    2. Nicholas Oulton & Gavin Wallis, 2015. "Integrated Estimates of Capital Stocks and Services for the United Kingdom: 1950-2013," CEP Discussion Papers dp1342, Centre for Economic Performance, LSE.
    3. Nicholas Oulton, 2007. "Ex Post Versus Ex Ante Measures Of The User Cost Of Capital," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 53(2), pages 295-317, June.
    4. B. Balk & H. Lorenz & J. Whalley & V. Valli & M. Kräkel, 1999. "Book reviews," Journal of Economics, Springer, vol. 69(1), pages 96-111, February.
    5. Munisamy, Gopinath & Roe, Terry L., 1995. "General Equilibrium Analysis of Supply and Factor Returns in U.S. Agriculture, 1949-91," Bulletins 7516, University of Minnesota, Economic Development Center.
    6. W. Erwin Diewert, 1997. "Alternative strategies for aggregating prices in the CPI - commentary," Review, Federal Reserve Bank of St. Louis, issue May, pages 127-138.
    7. Arnold J. Katz, 2008. "Accounting for Obsolescence: An Evaluation of Current NIPA Practice," BEA Papers 0089, Bureau of Economic Analysis.
    8. Munisamy Gopinath & Terry L. Roe, 1999. "Modeling inter‐sectoral growth linkages: An application to U.S. agriculture," Agricultural Economics, International Association of Agricultural Economists, vol. 21(2), pages 131-144, October.
    9. Charles R. Hulten, 2000. "Total Factor Productivity: A Short Biography," NBER Working Papers 7471, National Bureau of Economic Research, Inc.
    10. Ryan S. Mattson & Philippe de Peretti, 2014. "Investigating the Role of Real Divisia Money in Persistence-Robust Econometric Models," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) hal-00984827, HAL.
    11. Jahan, Nilufar & Smith, Perry & Rodriguez, Gil, 2002. "An analysis of the growth of the Australian dairy and meat processing industries," 2002 Conference (46th), February 13-15, 2002, Canberra, Australia 125113, Australian Agricultural and Resource Economics Society.
    12. W. Diewert, 2011. "Measuring productivity in the public sector: some conceptual problems," Journal of Productivity Analysis, Springer, vol. 36(2), pages 177-191, October.
    13. Erwin Diewert, 2009. "The aggregation of capital over vintages in a model of embodied technical progress," Journal of Productivity Analysis, Springer, vol. 32(1), pages 1-19, August.
    14. Sang V Nguyen & Arnold P Reznek, 1990. "Returns to Scale in Small and Large U.S. Manufacturing Establishments," Working Papers 90-11, Center for Economic Studies, U.S. Census Bureau.
    15. Ana Rincon-Aznar & Rebecca Riley & Garry Young, 2017. "Academic Review of Asset Lives in the UK," National Institute of Economic and Social Research (NIESR) Discussion Papers 474, National Institute of Economic and Social Research.
    16. Antonin Bergeaud & Gilbert Cette & Rémy Lecat, 2018. "The role of production factor quality and technology diffusion in twentieth-century productivity growth," Cliometrica, Springer;Cliometric Society (Association Francaise de Cliométrie), vol. 12(1), pages 61-97, January.
    17. Steinbuks, Jevgenijs & Neuhoff, Karsten, 2014. "Assessing energy price induced improvements in efficiency of capital in OECD manufacturing industries," Journal of Environmental Economics and Management, Elsevier, vol. 68(2), pages 340-356.
    18. Franz R. Hahn & Christa Magerl, 2006. "Sektorale Vermögensrechnung für Österreich," WIFO Studies, WIFO, number 25916, Juni.
    19. Stephen L. Parente, 2000. "Learning-by-Using and the Switch to Better Machines," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 3(4), pages 675-703, October.
    20. Nicholas Oulton & Sylaja Srinivasan, 2003. "Capital stocks, capital services, and depreciation: an integrated framework," Bank of England working papers 192, Bank of England.

    More about this item

    Keywords

    Potential growth ; Production function ; Total factor productivity ; Age of equipments.;
    All these keywords.

    JEL classification:

    • C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bfr:banfra:146. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Michael brassart (email available below). General contact details of provider: https://edirc.repec.org/data/bdfgvfr.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.