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