OUTPUT GAP AND SHOCKS DYNAMICS. THE CASE OF ROMANIA*Cornelia Scutaru () and Cristian Nicolae Stanica () Journal for Economic Forecasting, 2005, vol. 2, issue 4, pages 25-43 Abstract: This paper evaluates the output gap and the effects of the inflationist shocks to the Romanian economy. We use an extension of the Blanchard-Quah decomposition with three variables: the real output, the unemployment rate and the inflation. Three types of shocks are evaluated: the productivity shocks (on the supply side), the adverse shocks in the labor market and the adverse shocks in the goods and services market (inflationist shocks). The seasonal pattern of the data regarding the quarterly GDP imposes a deseasonalised approach. The analysis of the dynamics of the shocks is confirmed by the real evolutions in the Romanian economy over the period 1994-2003; also a Phillips relationship between inflation and unemployment is emphasized. The conclusions confirmed the relevance of the labor market shocks and the productivity shocks upon unemployment. The equilibrium was reached in about 4 years – as in the case of the output. As regards the productivity shocks, it was found that they did not have relevance on the market of goods and services. (*Paper prepared within the CERGE-EI project RRC IV-057 “Adapted models to estimate potential GDP in the candidate countries”, 2005). Keywords: output-gap; potential GDP; VAR models; Blanchard-Quah decomposition; impulse-response function (search for similar items in EconPapers) There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it. Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: http://EconPapers.repec.org/RePEc:rjr:romjef:v:2:y:2004:i:4:p:25-43 Access Statistics for this article Journal for Economic Forecasting is edited by Lucian Liviu Albu and Cornelia Scutaru More articles in Journal for Economic Forecasting from Institute for Economic Forecasting |
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