Estimating Romania’s potential GDP: a production function and multivariate approach
This research assesses Romania’s potential GDP and its variances employing the production function methodology and a multivariate approach. The Cobb-Douglas function measures potential production by integrating labor, capital, and total factor productivity (TFP), utilizing Kalman filtering for labor...
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| Format: | Article |
| Language: | English |
| Published: |
General Association of Economists from Romania
2025-03-01
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| Series: | Theoretical and Applied Economics |
| Subjects: | |
| Online Access: |
http://store.ectap.ro/articole/1826.pdf
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| author | Georgian Dănuț MIHAI Andreea-Mădălina BOZAGIU |
| author_facet | Georgian Dănuț MIHAI Andreea-Mădălina BOZAGIU |
| author_sort | Georgian Dănuț MIHAI |
| collection | DOAJ |
| description | This research assesses Romania’s potential GDP and its variances employing the
production function methodology and a multivariate approach. The Cobb-Douglas function
measures potential production by integrating labor, capital, and total factor productivity (TFP),
utilizing Kalman filtering for labor and the perpetual inventory approach for capital. TFP trends
are derived using the Hodrick-Prescott filter. A multivariate filter enhances potential GDP estimates
by correlating output gaps with inflation, unemployment, and capacity utilization. Bayesian
methodologies guarantee reliable parameter estimate. The results indicate cyclical variations, with
recessions and crises exerting enduring impacts on potential output. Structural changes and EU
entry foster long-term resilience, although inflation and labor dynamics are crucial factors. This
work enhances the precision of potential GDP calculation in a growing economy by integrating
various estimation methodologies. It presents empirical information regarding the enduring impacts
of economic shocks and furnishes insights for policymakers in formulating efficient fiscal and
monetary responses to macroeconomic volatility. |
| format | Article |
| id | doaj-art-166aaa5475004f0f9277b0564a69fc27 |
| institution | Kabale University |
| issn | 1841-8678 1844-0029 |
| language | English |
| publishDate | 2025-03-01 |
| publisher | General Association of Economists from Romania |
| record_format | Article |
| series | Theoretical and Applied Economics |
| spelling | doaj-art-166aaa5475004f0f9277b0564a69fc272025-08-20T03:52:57ZengGeneral Association of Economists from RomaniaTheoretical and Applied Economics1841-86781844-00292025-03-01XXXII134936418418678Estimating Romania’s potential GDP: a production function and multivariate approachGeorgian Dănuț MIHAI0Andreea-Mădălina BOZAGIU1 Bucharest University of Economic Studies, Romania Bucharest University of Economic Studies, Romania This research assesses Romania’s potential GDP and its variances employing the production function methodology and a multivariate approach. The Cobb-Douglas function measures potential production by integrating labor, capital, and total factor productivity (TFP), utilizing Kalman filtering for labor and the perpetual inventory approach for capital. TFP trends are derived using the Hodrick-Prescott filter. A multivariate filter enhances potential GDP estimates by correlating output gaps with inflation, unemployment, and capacity utilization. Bayesian methodologies guarantee reliable parameter estimate. The results indicate cyclical variations, with recessions and crises exerting enduring impacts on potential output. Structural changes and EU entry foster long-term resilience, although inflation and labor dynamics are crucial factors. This work enhances the precision of potential GDP calculation in a growing economy by integrating various estimation methodologies. It presents empirical information regarding the enduring impacts of economic shocks and furnishes insights for policymakers in formulating efficient fiscal and monetary responses to macroeconomic volatility. http://store.ectap.ro/articole/1826.pdf potential gdpproductionmultivariatetfp |
| spellingShingle | Georgian Dănuț MIHAI Andreea-Mădălina BOZAGIU Estimating Romania’s potential GDP: a production function and multivariate approach Theoretical and Applied Economics potential gdp production multivariate tfp |
| title | Estimating Romania’s potential GDP: a production function and multivariate approach |
| title_full | Estimating Romania’s potential GDP: a production function and multivariate approach |
| title_fullStr | Estimating Romania’s potential GDP: a production function and multivariate approach |
| title_full_unstemmed | Estimating Romania’s potential GDP: a production function and multivariate approach |
| title_short | Estimating Romania’s potential GDP: a production function and multivariate approach |
| title_sort | estimating romania s potential gdp a production function and multivariate approach |
| topic | potential gdp production multivariate tfp |
| url |
http://store.ectap.ro/articole/1826.pdf
|
| work_keys_str_mv | AT georgiandanutmihai estimatingromaniaspotentialgdpaproductionfunctionandmultivariateapproach AT andreeamadalinabozagiu estimatingromaniaspotentialgdpaproductionfunctionandmultivariateapproach |