Post-Crisis Potential Output in the Western Balkans

Abstract Spurred by the recent global economic crisis, there has been a resurgence of research on output gaps. As the crisis caused a decline in potential GDP due to a strong contraction in demand, it is expected that the recovery of potential output will be especially difficult in demand-driven small open economies, such as the Western Balkan countries, where recovery will strongly depend on global international trade recovery. The purpose of this research is to calculate and compare pre and post-crisis potential GDPs and GDP gaps for the Western Balkan countries. The symmetric filter method developed by Hodrick and Prescott is used to de-trend GDP time series data by decomposing it into growth and cyclical components. The results point to a strong decrease in potential output growth compared to the pre-crisis potential output growth of the Western Balkans.

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Estimating the Output Gap for Saudi Arabia

International Journal of Economics and Finance ◽

10.5539/ijef.v9n3p81 ◽

2017 ◽

Vol 9 (3) ◽

pp. 81 ◽

Cited By ~ 3

Author(s):

Ryadh M. Alkhareif ◽

William A. Barnett ◽

Nayef A. Alsadoun

Keyword(s):

Output Growth ◽

Total Output ◽

Output Gap ◽

Potential Output ◽

Real Gdp ◽

Advanced Economies ◽

Production Function Approach ◽

Potential Gdp ◽

The Difference ◽

Potential Output Growth

The objective of this paper is to estimate annual potential output growth and the output gap for the Saudi economy over the period 1980 to 2015, looking at both total output and non-oil output. The focus on the latter is so that the progress in diversifying the economy might be examined and the possible impact of diversification on potential output might be measured. We use three methods for estimating potential output proposed in the macroeconomic literature. The methodologies include the Hodrick-Prescott filter, Kalman filter, and the production function approach. We compare the three over the entire sample and the last five years. Our findings suggest that the output gap (the difference between actual and potential output, as measured by real GDP) is positive on average over the entire period (i.e., actual output has on average exceeded potential); however, the gap has turned negative and has shrunk in recent years, as fiscal expenditures, particularly in infrastructure, have acted to better align actual and potential. Our analysis also indicated that growth in both potential GDP and total factor productivity have accelerated in the 2011-2015 period. In contrast, growth in these factors has slowed in many other countries, particularly the advanced economies. This better performance of the Saudi economy is possibly due to the development of a resilient financial sector in the Saudi economy.

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2015 Spillover Report

Policy Papers ◽

10.5089/9781498344487.007 ◽

2015 ◽

Vol 2015 (43) ◽

Cited By ~ 2

Author(s):

Keyword(s):

Monetary Policy ◽

Aggregate Demand ◽

Output Growth ◽

Structural Reforms ◽

Demand And Supply ◽

Potential Output ◽

Advanced Economies ◽

Potential Output Growth ◽

Output Gaps ◽

The Impact

Many countries around the globe, particularly the systemic advanced economies, face the challenge of closing output gaps and raising potential output growth. Addressing these challenges requires a package of macroeconomic, financial and structural policies that will boost both aggregate demand and aggregate supply, while closing the shortfall between demand and supply. Each element of this package is important and one cannot substitute for the other: easy monetary policy will not raise potential output just as structural reforms will not close the output gap. This report studies the impact on emerging markets and nonsystemic advanced economies from monetary policy actions in systemic advanced economies, with a look also at knock-on effects from the decline in world oil prices.

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Fiscal and Financial Responses to the Economic Downturn

National Institute Economic Review ◽

10.1177/0027950110364105 ◽

2010 ◽

Vol 211 ◽

pp. R51-R62 ◽

Cited By ~ 3

Author(s):

Ray Barrell ◽

Dawn Holland

Keyword(s):

Output Growth ◽

Economic Downturn ◽

Quantitative Easing ◽

Potential Output ◽

Policy Responses ◽

The Us ◽

Potential Gdp ◽

The Uk ◽

Output Gaps ◽

Active Policy

The financial crisis that started in the summer of 2007 and worsened in the autumn of 2008 has involved a repricing of risk and a reduction in the level of potential output in the OECD of between 3 and 5 per cent. In addition it has caused a major recession, leaving output gaps in the UK, the US and the Euro Area currently standing at 3 to 5 per cent of potential GDP despite active policy responses. We show that monetary policy (and especially quantitative easing) has increased output growth in the US and the UK by half a per cent in 2009, and will do the same in 2010Q1. Fiscal policy is also shown to have been effective, but we argue that more could have been done if unfounded worries about excess borrowing had not arisen.

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The Effects of Oil Prices Changes on Output Growth and Inflation: Evidence from Turkey

Journal of Economics and Behavioral Studies ◽

10.22610/jebs.v5i11.446 ◽

2013 ◽

Vol 5 (11) ◽

pp. 730-739 ◽

Cited By ~ 1

Author(s):

Pelin Ã–GE GÃœNEY

Keyword(s):

Time Series Data ◽

Output Growth ◽

Oil Price ◽

Series Data ◽

Negative Effects ◽

Price Changes ◽

Asymmetric Effects ◽

Price Increases ◽

Causality Tests ◽

The Impact

This paper investigates the effects of oil price changes on output and inflation for the case of Turkey using monthly time series data for the period 1990:1â€“2012:3. Recent studies suggest that oil price changes may have asymmetric effects on the macroeconomic variables. To account for asymmetric effects, we decompose oil price changes into positive and negative parts following Hamilton (1996). Our results show that while oil price increases have clear negative effects on output growth, the impact of oil price decline is insignificant. Similarly, oil price increases have positive and significant effects on inflation. However, oil price declines have not a significant effect on inflation. The Granger causality tests also support these results.

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THE TESTING OF MONEY NEUTRALITY IN ECONOMIC GROWTH OF INDONESIA

Management and Economics Journal (MEC-J) ◽

10.18860/mec-j.v1i1.4575 ◽

2017 ◽

Vol 1 (1) ◽

pp. 12

Author(s):

Muammil Sun’an ◽

Amran Husen

Keyword(s):

Economic Growth ◽

Time Series Data ◽

Output Growth ◽

Broad Sense ◽

Series Data ◽

Analysis Tool ◽

Real Sector ◽

Short Term ◽

Correction Model

This study aim is to test the money neutrality in a narrow sense (M1) and a broad sense (M2) to the growth of output (GDP) in Indonesia, both in short term and long term. This research uses quarterly time series data at 2010 - 2016 periods. The analysis tool used is Error Correction Model (ECM). The results show that short-term money supply (M1 and M2) affect on output growth. However, in the long term, only money circulation in a broad sense (M2) affects on output growth, which also means that money is not neutral because it affects the real sector (GDP). Keywords: M1, M2, Population, Capital, and Economic Growth.

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The effects of fiscal operations on economic growth and stability in Nigeria: empirical evidence based on time series data

International Journal of Accounting and Economics Studies ◽

10.14419/ijaes.v6i1.9258 ◽

2018 ◽

Vol 6 (1) ◽

pp. 36

Author(s):

Miftahu Idris ◽

Rosni Bakar ◽

Tunku Salha Tunku Ahmad

Keyword(s):

Economic Growth ◽

Time Series ◽

Alternative Model ◽

Time Series Data ◽

Output Growth ◽

Series Data ◽

Economic Stability ◽

Economic Management ◽

Baseline Model ◽

Desirable Outcome

This study examines the effects of fiscal operations on the economic growth and stability with the view to identifying its significance on real output growth and sustainable development. The study utilises an annual time series data covering the period of 1980 to 2015 and further adopts an ARDL model for estimation. The estimated model is sub-divided into two: the Baseline model and the Alternative model. While the former measures the effects of economic growth, the latter accounts for the effects of economic stability. The ARDL Bound testing show the existence of long-run relationship among the examined variables in both the two models, with corresponding F-statistic values of 7.62 and 6.67, respectively. The overall results indicate that fiscal operations lead to economic growth as shown by the Baseline model; and it also leads to economic stability as revealed by the Alternative model. It can therefore be concluded that any meaningful spending with corresponding taxation will improve the public sector performance and produce a desirable outcome on output growth and strengthen the capability of fiscal operations in terms of economic management. There is an urgent need to ensure that appropriate fiscal operations are conducted and do not result in excess liquidity beyond the absorptive capacity of the economy.

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Secular Stagnation and Income Distribution Dynamics

Review of Radical Political Economics ◽

10.1177/0486613419895143 ◽

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.

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