IMF Estimates of Potential Output: Theory and Practice

IMF Working Papers, December 1, 1997

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IMF Estimates of Potential Output: Theory and Practice

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Bibliographic details

• Authors: Paula De Masi
• Published: December 1, 1997
• Series: IMF Working Papers
• DOI: https://doi.org/10.5089/9781451974980.001

Summary and purpose

• The concepts of potential output and the output gap are central to the IMF’s analytical work in providing policy recommendations to member governments.
• The paper summarizes the methodology and results of IMF research on potential output.
• The paper discusses approaches that country desk officers use for operational purposes and presents estimates of potential output for the major industrial countries.
• The Working Paper emphasizes that IMF research has focused mainly on the industrial countries but more recently has addressed issues related to developing countries and countries in transition.

Methodology and research focus

• Summarizes IMF research aimed to develop and refine estimation techniques for potential output and the output gap.
• Research topics noted: production function approach, output gap model, total factor productivity, production growth.
• Geographic foci mentioned: industrial countries, developing countries, countries in transition, East Asia, Europe.

Operational approaches and findings

• Discusses the approaches country desk officers use for operational purposes.
• Presents estimates of potential output for the major industrial countries.

Policy relevance

• Links estimates of potential output and the output gap to IMF analytical work that informs policy recommendations to member governments.
• Positions the Working Paper as contributing to methodological foundations used in IMF policy analysis.

Subjects and keywords

• Subject: Labor, Output gap, Potential output, Production, Production growth, Total factor productivity
• Keywords: analytical work, East Asia, Europe, IMF research, IMF review, IMF staff country report, output gap, output gap model, potential output, production function, production function approach, Production growth, Total factor productivity, WP

IMF Working Paper: "IMF Estimates of Potential Output: Theory and Practice", Paula De Masi, December 1, 1997.

Content in this bundle

• IMF Estimates of Potential Output : Theory and Practice - WP/97/177
  • IMF Estimates of Potential Output : Theory and Practice - WP/97/177 (Markdown version)
  • IMF Estimates of Potential Output : Theory and Practice - WP/97/177 (PDF)