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Potential Output in the Seven Major OECD Countries


  • Raymond Torres


  • John P. Martin



This paper outlines the concepts and methods used by the OECD Secretariat to derive estimates of potential output and capacity utilisation for the major seven countries. While there are many alternative definitions of potential output, the one which is currently being used by the OECD Secretariat refers to the level of output that is consistent over the medium-term with stable inflation. The paper also contrasts the OECD approach and estimates with those published recently by the IMF. Finally, it presents the results of some INTERLINK simulations designed to illustrate some of the possible effects of faster productivity and potential output growth on macroeconomic performance ... Cet article décrit les concepts et les méthodes utilisés par le Secrétariat de l'OCDE pour estimer le potentiel de production et le taux d'utilisation des capacités des sept grands pays de l'OCDE. Le potentiel de production estimé par le Secrétariat de l'OCDE est défini comme le niveau de production compatible à moyen terme avec une inflation stable, étant entendu qu'il existe beaucoup d'autres défintions possibles. En outre, l'article compare l'approche et les estimations de l'OCDE avec celles que le FMI a publiées récemment. Enfin, quelques effects possibles d'une plus forte croissance de le productivité et du potential de production sont illustrés au moyen de simulations du modèle INTERLINK ...

Suggested Citation

  • Raymond Torres & John P. Martin, 1989. "Potential Output in the Seven Major OECD Countries," OECD Economics Department Working Papers 66, OECD Publishing.
  • Handle: RePEc:oec:ecoaaa:66-en

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    References listed on IDEAS

    1. Dan Andrews & Federico Cingano, 2014. "Public policy and resource allocation: evidence from firms in OECD countries," Economic Policy, CEPR;CES;MSH, vol. 29(78), pages 253-296, April.
    2. Horvath, Roman, 2011. "Research & development and growth: A Bayesian model averaging analysis," Economic Modelling, Elsevier, vol. 28(6), pages 2669-2673.
    3. Dan Andrews & Ben Westmore, 2014. "Managerial Capital and Business R&D as Enablers of Productivity Convergence," OECD Economics Department Working Papers 1137, OECD Publishing.
    4. Chad Syverson, 2011. "What Determines Productivity?," Journal of Economic Literature, American Economic Association, vol. 49(2), pages 326-365, June.
    5. Dan Andrews & Chiara Criscuolo, 2013. "Knowledge-Based Capital, Innovation and Resource Allocation: A Going for Growth Report," OECD Economic Policy Papers 4, OECD Publishing.
    6. Ben Westmore, 2013. "R&D, Patenting and Growth: The Role of Public Policy," OECD Economics Department Working Papers 1047, OECD Publishing.
    7. Gilbert Cette & Jimmy Lopez & Jacques Mairesse, 2016. "Product and Labour Market Regulations, Production Prices, Wages and Productivity," Review of Economics and Institutions, Università di Perugia, vol. 7(2).
    8. Kevin J. Fox & Gilbert Cette & Jimmy Lopez & Jacques Mairesse, 2017. "Upstream Product Market Regulations, ICT, R&D and Productivity," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 63, pages 68-89, February.
    9. Roman Horváth, 2011. "Research & Development and Long-Term Economic Growth: A Bayesian Model Averaging Analysis," Working Papers IES 2011/19, Charles University Prague, Faculty of Social Sciences, Institute of Economic Studies, revised Jun 2011.
    10. Kao, Chihwa, 1999. "Spurious regression and residual-based tests for cointegration in panel data," Journal of Econometrics, Elsevier, vol. 90(1), pages 1-44, May.
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    12. Peter Gal & Adam Theising, 2015. "The macroeconomic impact of structural policies on labour market outcomes in OECD countries: A reassessment," OECD Economics Department Working Papers 1271, OECD Publishing.
    13. Peter N. Gal, 2013. "Measuring Total Factor Productivity at the Firm Level using OECD-ORBIS," OECD Economics Department Working Papers 1049, OECD Publishing.
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    Cited by:

    1. M. Demertzis & P.J.A. van Els & H.M.M. Peeters, 2002. "EUROMON: De Nederlandsche Bank's Multi-Country Model," WO Research Memoranda (discontinued) 718, Netherlands Central Bank, Research Department.
    2. Demertzis, Maria & Van Els, Peter & Grob, Sybille & Peeters, Marga, 2006. "EUROMON: The multi-country model of De Nederlandsche Bank," MPRA Paper 28512, University Library of Munich, Germany.
    3. Sergey Sinelnikov-Murylev & Sergey Drobyshevsky & Maria Kazakova & Michael Alexeev, 2016. "Decomposition of Russia's GDP Growth Rates," Research Paper Series, Gaidar Institute for Economic Policy, issue 167P, pages 123-123.

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