Razin, Assaf - In: Journal of Money, Credit and Banking 37 (2005) 1, pp. 179-90
also investment in capacity. Potential output, denned as the flexible-price equilibrium output depends endogenously on … in real marginal costs, and the latter is uniquely associated with movements in the output gap. In the presence of …. Implications for central bank targeting of potential output and for the estimation of the Phillips curve are pointed out. …