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Potential Output Growth in Emerging Market Countries: The Case of Chile
Author:
Mr. Jorge Roldos
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Series:
IMF Working Papers
Volume/Issue:
Volume 1997: Issue 104
Language:
English
Publication Date:
01 Sep 1997
DOI:
https://doi.org/10.5089/9781451947977.001
ISBN:
9781451947977
ISSN:
1018-5941
Pages:
26
Keywords:
WP; production function; TFP growth; GDP; Output; Emerging Markets; Chile; TFP series; A. production function; growth experience; production function approach; labor quality index; estimates of total factor productivity; TFP growth rate; Total factor productivity; Potential output; Production growth; Output gap; East Asia
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IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
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This paper estimates potential output and the sources of growth in Chile during 1970-96. Actual output is cointegrated with the quality-adjusted measures of capital and labor, and constant returns to scale cannot be rejected. The estimates of potential output show a positive output gap in the years when the Chilean economy was deemed to be overheated. In 1986-90, the quality-adjusted labor variable explains close to 60 percent of the growth rate of GDP, while during 1991-95 capital formation plays a dominant role. The contribution of TFP growth in Chile is relatively small, but, based on a comparison with European and East Asian experiences, it is expected to increase in the medium term.
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Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund