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A Fresh Look at Potential Output in Central, Eastern, and Southeastern European Countries
Author:
Jiri Podpiera null

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Ms. Faezeh Raei
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Ara Stepanyan
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Series:
IMF Working Papers
Volume/Issue:
Volume 2017: Issue 037
Language:
English
Publication Date:
14 Feb 2017
DOI:
https://doi.org/10.5089/9781475578980.001
ISBN:
9781475578980
ISSN:
1018-5941
Pages:
37
Keywords:
WP; output gap estimate; CESEE; Potential output; Output gap; Emerging Markets; core inflation; output gap amplitude; MVF FIN; CESEE economy; Capacity utilization; Inflation; Total factor productivity; Global; Baltics; Central and Eastern Europe
Legal-disclaimer:
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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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.
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Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund