The recent global financial crisis illustrates that financial frictions are a significant source of volatility in the economy. This paper investigates monetary policy stabilization in an environment where financial frictions are a relevant source of macroeconomic fluctuation. We derive a measure...

Korea’s rapid growth has slowed in recent years, suggesting lower potential growth. This paper uses an array of techniques, including statistical filters, a multivariate model and the production function, to estimate Korea’s potential growth. The main finding is that trend growth...

In this paper we present various techniques to estimate Sri Lanka’s potential output and output gap, including statistical and model-based approaches. Compared to conventional statistical filters that rely exclusively on information in a single series, the model-based approaches allow...

The Middle East and Central Asia’s economic growth potential is slowing faster than in other emerging and developing regions, dampening hopes for reducing persistent unemployment and improving the region’s generally low living standards. Why? And is it possible to alter this...

Potential Output is a key factor for debt sustaintability analysis and for developing strategies for growth, but unfortunately it is an unobservable variable. Using three methodologies (production function, switching, and state-space), this paper computes potential output for CAPDR countries...

Intro -- Contents -- I. INTRODUCTION -- II. THE NONACCELERATING INFLATION RATE OF FACTOR UTILIZATION -- III. FACTOR UTILIZATION IN RUSSIA -- A. Capacity Utilization -- B. Labor Utilization -- C. Estimating the Natural Rate -- IV. OUTPUT GAP ESTIMATES -- A. Trend Fitting and Statistical Filtering...

Uncertainty around the real-time output gap has important implications for fiscal policy. This study uses successive vintages of the World Economic Outlook for emerging markets (EMs) during 1998-2022 to examine the reaction of discretionary fiscal policy to uncertain economic cycle in real-time....

This paper assesses Morocco's potential output and the scope for structural reforms to reverse the downward trend in economic performance observed since the Global Financial Crisis. Using multivariate filtering (MVF) techniques, our analysis finds that the downward secular trend in potential...

This paper analyzes the drivers of India's growth in the past five decades and considers baseline and upside scenarios of India's medium-term potential growth. Using a production function approach, the paper assesses the impact of the pandemic on the key factors of production and therefore its...