scholarly journals Secular Stagnation and Income Distribution Dynamics

2020 ◽  
Vol 52 (2) ◽  
pp. 189-207
Author(s):  
David Kiefer ◽  
Ivan Mendieta-Muñoz ◽  
Codrina Rada ◽  
Rudiger von Arnim
Keyword(s):  
Income Distribution ◽  
Capacity Utilization ◽  
The United States ◽  
Output Growth ◽  
Model Specification ◽  
Secular Stagnation ◽  
Labor Share ◽  
Potential Output ◽  
Us Economy ◽  
Potential Output Growth

This paper contributes to the literature on secular stagnation by estimating a measure of potential output growth for the post-war US economy derived from a novel model specification that allows for the cyclical interactions between income distribution, represented by the trajectory of the labor share of income, and economic activity, as measured by capacity utilization. The results obtained show that potential output growth exhibits a gradual decline that predates the Great Recession and follows the downward trajectory of the labor share of income, thus suggesting the existence of an important long-run relationship between income distribution and output growth in the United States.

scholarly journals A Multivariate Filter to Estimate Potential Output and NAIRU for the Maltese Economy

2016 ◽  
Vol 8 (5) ◽  
pp. 13 ◽  
Author(s):  
Brian Micallef
Keyword(s):  
Structural Changes ◽  
Phillips Curve ◽  
Negative Impact ◽  
Open Economies ◽  
Capacity Utilization ◽  
Value Added ◽  
Output Growth ◽  
Potential Output ◽  
Potential Output Growth ◽  
High Degree

<p>This paper applies a multivariate filter on a small macroeconomic model to derive estimates of Malta’s potential output growth, the output gap and NAIRU. The unobservable variables are derived from a system that incorporates long-standing relationships in economic theory, such as the Phillips Curve and Okun’s Law, while also allowing for hysteresis effects. Given the structural changes in the Maltese economy, with a shift over the past decade from traditional industries such as manufacturing towards higher-value added and export-oriented services, the model replaces a common variable used in the literature, capacity utilization in manufacturing, with two foreign variables, demand and imported inflation. The inclusion of foreign variables is important since Malta is one of the most open economies in the world with a high degree of import content. The model is also able to account for the high degree of volatility manifested in the time series of very small open economies. The estimates from the multivariate filter are compared with those derived from alternative approaches. Despite the negative impact from the financial crisis of 2009, by 2014 potential output growth had already surpassed the pre-crisis growth rates. The crisis had no permanent impact on NAIRU. This performance is clearly at odds with that of other European economies and bodes well for Malta’s convergence process.</p>

scholarly journals ICT diffusion and potential output growth

2005 ◽  
Vol 87 (2) ◽  
pp. 231-234 ◽  
Author(s):  
Gilbert Cette ◽  
Jacques Mairesse ◽  
Yusuf Kocoglu
Keyword(s):  
Output Growth ◽  
Potential Output ◽  
Potential Output Growth

scholarly journals Potential Output in Asia: Some Forward-Looking Scenarios

2016 ◽  
Vol 33 (2) ◽  
pp. 28-55
Author(s):  
Andrew Burns
Keyword(s):  
Total Factor Productivity ◽  
Productivity Growth ◽  
Output Growth ◽  
Total Factor Productivity Growth ◽  
Investment Climate ◽  
Participation Rates ◽  
Factor Productivity ◽  
Potential Output ◽  
Asian Economies ◽  
Potential Output Growth

This paper presents estimates of potential output growth for a sample of 26 Asian economies and projects potential output growth through 2040 under several scenarios. Results suggest that in the absence of further capital deepening, and assuming continued total factor productivity growth at recent rates, potential output growth across economies could slow from a median of 4.6% during 2010–2015 to 2.7% between 2035 and 2040. Demographic trends and an assumed stabilization in capital–output ratios account for most of the slowing. Much better outcomes are possible if trends are supported by policy. Better total factor productivity growth could raise potential output by between 11% and 24% by 2040, while lower unemployment and higher participation rates could boost potential output by 10% or more in some South Asian economies. An improved investment climate could add between 6% and 10% to potential output in most economies, while accelerating structural convergence (moving labor from lower to higher productivity sectors) could raise potential output by 10% or more in half of the examined countries.

scholarly journals Macroeconomic theory in the aftermath of the crisis: mainstream and new Keynesianism

Nova Economia ◽  
2015 ◽  
Vol 25 (2) ◽  
pp. 237-260 ◽  
Author(s):  
Ítalo Pedrosa ◽  
Maryse Farhi
Keyword(s):  
Monetary Policy ◽  
Inflation Rate ◽  
Financial System ◽  
Output Growth ◽  
Short Term ◽  
Macroeconomic Theory ◽  
Potential Output ◽  
Potential Output Growth ◽  
New Variables ◽  
Main Change

Abstract: The failure of mainstream macroeconomics to provide a suitable set of instruments to understand and fight against the economic crisis has triggered a debate among the dominant theoretical tendency, on its own foundations and on the macroeconomic policy that should be implemented after the crisis. The aim of this paper is to investigate to what extent the crisis affected mainstream macroeconomic theory and policy guidelines. We argue that new Keynesians did not pass unharmed by the crisis, themselvesacknowledging the need to adapt their models through the incorporation of new variables and ideas. The main change is the recognition of the non-neutrality of the financial system, which calls into question monetary policy guided by one instrument, the short-term interest rate, and by one target, the inflation rate, which would be insufficient to simultaneously lead to a stable and near potential output growth whilemaintainingthe stability of the financial system.

scholarly journals Estimating the Output GAP for Lebanon: A Production Function methodology

2019 ◽  
Vol 2 (1) ◽  
pp. 60-83
Author(s):  
Latifa Ghalayini
Keyword(s):  
Economic Growth ◽  
Economic Policy ◽  
Labor Market ◽  
Production Function ◽  
Output Growth ◽  
Output Gap ◽  
Structural Reforms ◽  
Potential Output ◽  
Potential Output Growth ◽  
Douglas Production Function

This paper estimates the output Gap for Lebanon to analyze the economic policy and to judge the stance of the economy. Therefore, a Cobb-Douglas production function is estimated for the period Q11998 to Q42015 and potential output calculated by substituting for potential levels of the factors in the estimated production function. The calculation of potential labor required the calculation of the NAIRU. This paper calculates therefore three types of NAIRU. The results of output gap calculations show that the Lebanese economy is working over its capacity and that it hits his limits. Furthermore, findings show that the labor market is characterized by high levels of NAIRU which restricted potential output growth. Therefore, any policy aiming to increase economic growth, while neglecting structural reforms will prove to be unsustainable.

scholarly journals Estimates Of Russia’s Potential Output

Ekonomika ◽  
2021 ◽  
Vol 100 (2) ◽  
pp. 84-100
Author(s):  
Martin Janíčko ◽  
Petr Maleček ◽  
Pavel Janíčko
Keyword(s):  
Oil And Gas ◽  
Output Growth ◽  
Change Scenario ◽  
Demographic Development ◽  
Potential Output ◽  
Gas Drilling ◽  
Russian Economy ◽  
Current Context ◽  
Potential Output Growth ◽  
Sample Time

Taking into consideration the specifics of the Russian economy such as dependency on oil and gas drilling & production, and including the current context of the Western sanctions, COVID-19 pandemic, as well as somewhat idiosyncratic potential output development, the main aim of this paper is to quantify recent output gap for Russia. We use three mainstream methodologies: the Hodrick-Prescott filter as a benchmark, the Kalman filter to follow, and the Cobb-Douglas production function. The sample time span ranges from 1995Q1 until 2020Q3, while all calculations are performed on quarterly frequencies. The analysis suggests that given low fixed investment ratios, limited R&D spending in non-military sectors, and adverse demographic development, under a “no policy change” scenario there might soon be even more downward pressures on the country’s potential output growth, and the economy may continue increasing only at a snail’s pace even after a possible withdrawal of the Western sanctions and the end of the COVID-19 pandemic.

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