Measures of Potential Output: An Application to Israel

Author/Editor:

Fabio Scacciavillani ; Phillip L Swagel

Publication Date:

July 1, 1999

Electronic Access:

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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 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.

Series:

Working Paper No. 1999/096

Subject:

Business cycles Economic growth Inflation Output gap Potential output Prices Production Production growth Productivity

English

Publication Date:

July 1, 1999

ISBN/ISSN:

9781451851892/1018-5941

Stock No:

WPIEA0961999

Pages:

28

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