Measures of Potential Output: An Application to Israel
July 1, 1999
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Summary
This paper estimates measures of potential output for Israel, with the aim of providing evidence on whether the recent growth slowdown is principally a cyclical slowdown or a structural shift toward a slower growth path after the dramatic developments associated with the years of heavy immigration. Israel poses a challenge because traditional methods of measuring potential output assume relatively stable conditions over an extended period of time. We employ five methodologies to derive estimates and find that four of the measures imply the slowdown stems largely from reduced growth of potential output rather than a cyclical slowdown.
Subject: Business cycles, Economic growth, Inflation, Output gap, Potential output, Prices, Production, Production growth, Productivity
Keywords: Business cycles, give output gaps, HP filter, implied output gap, Inflation, output gap, output gap in the HP filter, output gaps from the wavelet, potential output, price level, production function, production function methodology, Production growth, rate of inflation, wavelets analysis, WP
Pages:
28
Volume:
1999
DOI:
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Issue:
096
Series:
Working Paper No. 1999/096
Stock No:
WPIEA0961999
ISBN:
9781451851892
ISSN:
1018-5941
