The IMF Working Papers series is designed to make IMF staff research available to a wide audience. Almost 300 Working Papers are released each year, covering a wide range of theoretical and analytical topics, including balance of payments, monetary and fiscal issues, global liquidity, and national and international economic developments.
Was the postcrisis growth slowdown in Central, Eastern and Southeastern Europe (CESEE)
structural or cyclical? We use three different methods-production function approach, basic
multivariate filter, and multivariate filter with financial frictions-to evaluate potential growth
and output gaps for 18 CESEE countries during 2000-15. Our findings suggest that potential
growth weakened significantly after the crisis across most countries in the region. This decline
appears to be largely due to stagnant productivity and weaker capital accumulation, which were
associated with common external factors, including trading partners' slow potential growth, but
also decline in global trade and stalled expansion of global value chains. Our estimates suggest
that output gaps in 2015 were largely closed in many countries in the region.