Structural Breaks in Potential GDP for Romanian Economy

Dorin Jula and Nicoleta Jula
Authors registered in the RePEc Author Service: Nicolae Marius Jula

Computational Methods in Social Sciences (CMSS), 2018, vol. 6, issue 1, 23-41

Abstract: In the paper we have calculated the potential gross domestic product for Romanian economy, by using both the trend functions (deterministic and stochastic) and the filters (Hodrick-Prescott filter and band-pass filters). We found that the logquadratic deterministic trend with structural breaks method offer the best outcomes. Bai-Perron tests has selected 1999q1 and 2009q1 as moments of structural breaks. According this technique, the Romanian potential GDP was over 6% during the 2004-2008 period and returns to around 6% in the years 2016-2017. With a few exceptions (recorded before 2010), output gap was above -0.5 and below +0.5% of GDP. This mean that the evolution of economic growth in Romania (especially after 2010) do not has induced inflationary pressures, through supply-side.

Keywords: potential gross domestic product; output gap; trend functions; structural breaks filters (search for similar items in EconPapers)
Date: 2018
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Persistent link: https://EconPapers.repec.org/RePEc:ntu:ntcmss:vol6-iss1-23-41

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