Estimating Poland's Potential Output: A Production Function Approach

Author/Editor: Epstein, Natan ; Macchiarelli, Corrado
Publication Date: January 01, 2010
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Summary: The paper develops a methodology based on the production-function approach to estimate potential output of the Polish economy. The paper concentrates on obtaining a robust estimate of the labor input by deriving Poland's natural rate of unemployment. The estimated unemployment gap is found to track well pressures on resource constraints. Moreover, the overall results show that, prior to the recent global financial crisis, Poland's output and employment were both growing above potential. The production function is also used to derive medium-term projections of the output gap. According to our methodology, in the aftermath of the global crisis, Poland is not expected to experience a sizable and persistent negative output gap.
Series: Working Paper No. 10/15
Subject(s): Economic models | Employment | Production growth | Productivity | Unemployment

Author's Keyword(s): Production function | potential growth | output gap | NAIRU.
Publication Date: January 01, 2010
ISBN/ISSN: 9781451962093 Format: Paper
Stock No: WPIEA2010015 Pages: 12
US$18.00 (Academic Rate:
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