The production function methodology for calculating potential growth rates & output gaps

This paper provides a detailed description of the current version of the Ecofin Council approved production function (PF) methodology which is used for assessing both the productive capacity (i.e. potential output) and cyclical position (i.e. output gaps) of EU economies. Compared with the previous...

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Bibliographic Details
Published in:European Economy. Economic Papers 2015, Vol.535, vember 2014
Main Authors: Havik, Karel, Mc Morrow, Kieran, Orlandi, Fabrice, Planas, Christophe, Raciborski, Rafal, Röger, Werner, Rossi, Alessandro, Thum-Thysen, Anna, Vandermeulen, Valerie
Format: Article
Language:English
Subjects:
development potential
economic cycle
economic growth
economic indicator
EU production
factor of production
macroeconomics
national economy
production capacity
productivity
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Summary:This paper provides a detailed description of the current version of the Ecofin Council approved production function (PF) methodology which is used for assessing both the productive capacity (i.e. potential output) and cyclical position (i.e. output gaps) of EU economies. Compared with the previous 2010 paper on the same topic, there have been two significant changes to the PF methodology, namely an overhaul of the NAWRU methodology & the introduction of a new T+10 methodology.
ISSN:1725-3187
1725-3187