Potential Output Growth in Emerging Market Countries: The Case of Chile

September 1, 1997

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

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.

Subject: Labor, Output gap, Potential output, Production, Production growth, Total factor productivity

Keywords: A. production function, Chile, East Asia, Emerging Markets, estimates of total factor productivity, GDP, growth experience, labor quality index, Output, Output gap, Potential output, production function, production function approach, Production growth, TFP growth, TFP growth rate, TFP series, Total factor productivity, WP

Pages:
26
Volume:
1997
DOI:
https://doi.org/10.5089/9781451947977.001
Issue:
104
Series:
Working Paper No. 1997/104
Stock No:
WPIEA1041997
ISBN:
9781451947977
ISSN:
1018-5941

IMF’s Work

RESOURCES

TOPICS

Flagship Publications

Other Publications

IMF reports and publications by country

Regional Offices

All News

See Also

For Journalists

Press Center

RESOURCES

FLAGSHIPS

KEY SERIES

IMF NOTES

Loading component...

IMF Working Papers