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

Author/Editor:

Jorge Roldos

Publication Date:

September 1, 1997

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 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.

Series:

Working Paper No. 1997/104

Subject:

Labor Output gap Potential output Production Production growth Total factor productivity

English

Publication Date:

September 1, 1997

ISBN/ISSN:

9781451947977/1018-5941

Stock No:

WPIEA1041997

Pages:

26

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