Measures of Potential Output: An Application to Israel

By Fabio Scacciavillani, Phillip L Swagel

July 1, 1999

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Fabio Scacciavillani, and Phillip L Swagel. Measures of Potential Output: An Application to Israel, (USA: International Monetary Fund, 1999) accessed December 22, 2024

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.

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

Keywords: Business cycles, Give output gaps, HP filter, Implied output gap, Inflation, Output gap, Output gap in the HP filter, Output gaps from the wavelet, Potential output, Price level, Production function, Production function methodology, Production growth, Rate of inflation, Wavelets analysis, WP

Publication Details

Pages:

28
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 1999/096
Stock No:

WPIEA0961999
ISBN:

9781451851892
ISSN:

1018-5941

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