Output Gaps in European Monetary Union: New Insights from Input Augmentation in the Technological Progress

Dimitz, Maria Antoinette (July 2001) Output Gaps in European Monetary Union: New Insights from Input Augmentation in the Technological Progress. IHS Economics Series 102

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Abstract or Table of Contents

Abstract: Output gaps for ten European countries and the USA are estimated based on a CES production function with input augmentation in the technological progress. The substitution parameter is estimated from the coefficients of the labor and capital demand functions. The estimation is done using Johansen's cointegration method. For six of the eleven countries analyzed, the use of the Cobb Douglas form would not be appropriate. The output gaps show a similar cyclical pattern for all countries.They remain mostly within ±3% for five countries and within ±5% for another four. Separating labor- and capital-augmenting technological progress gives insight into the driving forces of growth.;

Item Type: IHS Series
Keywords: 'Output gap' 'Potential output' 'CES production function' 'EMU'
Classification Codes (e.g. JEL): C32, E32
Status: Published
Date Deposited: 26 Sep 2014 10:37
Last Modified: 25 Jul 2017 07:12
URI: http://irihs.ihs.ac.at/id/eprint/1362

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