Potential Output: Measurement Methods, "New" Economy Influences and Scenarios for 2001-2010 - A comparison of the EU-15 and the US

Kieran Mc Morrow and Werner Roeger

No 150, European Economy - Economic Papers 2008 - 2015 from Directorate General Economic and Financial Affairs (DG ECFIN), European Commission

Abstract: This paper presents an overview of the various methodologies for estimating potential output at the macroeconomic level. Emphasis was laid on the production function approach which is used together with the univariate statistical HP filter method to produce potential output estimates for the US and the EU15 economies (as well as the individual EU Member States) from 1966-2002. The paper also assesses the role of "new" economy influences on potential growth and provides estimates of the likely contribution to past and future output capacity from this source. Finally, potential growth scenarios are given for the EU15 as a whole and the US for the period 2001-2010, with the central scenario pointing to annual average growth rates of 2 ¾% for the EU15 and 3% for the US over the next ten years.

Keywords: macroeconomic analysis; potential growth; potential output (search for similar items in EconPapers)
Pages: 142 pages
Date: 2001-04
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Citations: View citations in EconPapers (6)

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Persistent link: https://EconPapers.repec.org/RePEc:euf:ecopap:0150

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