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Is potential output growth falling?

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  • Mendieta-Muñoz, Ivan

Abstract

We estimate the rate of growth consistent with a stable unemployment rate for four advanced economies (Canada, Germany, the United Kingdom and the United States) using a Heckman-type two step estimation procedure that deals with the issue of endogenous regressors in a time-varying parameter model. The results show that this rate of growth of potential output has been falling in the four countries of study, so that these countries have been systematically loosing capacity to grow during the postwar era.

Suggested Citation

  • Mendieta-Muñoz, Ivan, 2015. "Is potential output growth falling?," MPRA Paper 68278, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:68278
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    More about this item

    Keywords

    potential output growth rate; constant unemployment rate; time-varying parameter models;
    All these keywords.

    JEL classification:

    • C50 - Mathematical and Quantitative Methods - - Econometric Modeling - - - General
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • O49 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Other

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