Germany’s Growth Prospects against the Backdrop of Demographic Change

Sebastian Breuer and Steffen Elstner

Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), 2020, vol. 240, issue 5, 565-605

Abstract: This paper shows how the German Council of Economic Experts (GCEE) determines Germany’s potential output, and compares the results with those of the European Commission. The approach of the European Commission is a natural benchmark, as it provides the basis for the deficit and debt rules of the European Union. In comparison with the European Commission’s method, the GCEE’s method places greater emphasis on demographic factors in estimating labour input. Additionally, both approaches differ regarding how they estimate the structural unemployment rate and total factor productivity. Finally, this paper discusses the limitations of, and the different options for estimating potential output.

Keywords: potential output growth; output gap; demographic change (search for similar items in EconPapers)
JEL-codes: E17 E37 O40 (search for similar items in EconPapers)
Date: 2020
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Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:jns:jbstat:v:240:y:2020:i:5:p:565-605:n:2

DOI: 10.1515/jbnst-2018-0094

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