Potential Output in the Czech Republic: A Production Function Approach
Jaromir Hurnik and
David Navratil ()
Prague Economic Papers, 2005, vol. 2005, issue 3, 253-266
This paper deals with the Czech economy supply side performance from the macroeconomic point of view. In order to evaluate the supply side behaviour we calculate the potential output dynamic path and contribution of its particular determinants using the production function method. The results show that the potential output growth was rather slow around 2 per cent. This implies that e. g. even 3 per cent growth can cause macroeconomic imbalances. Increase of the non-accelerating-inflation-rate of unemployment (NAIRU), weak growth of the capital stock and weak growth of total factor productivity appear to be the reasons for the constrained ability of the Czech economy to grow steadily and converge to EU level.
Keywords: capital stock; potential output; production function; NAIRU; total factor productivity (search for similar items in EconPapers)
JEL-codes: E23 O47 (search for similar items in EconPapers)
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