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Structural Breaks in Potential GDP for Romanian Economy

Author

Listed:
  • Dorin JULA

    (Ph.D, Financial Management Faculty, Ecological University of Bucharest and Institute for Economic Forecasting, Romanian Academy)

  • Nicoleta JULA

    (Ph.D, Faculty of Economics and Business Administration, "Nicolae Titulescu" University of Bucharest)

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.

Suggested Citation

  • Dorin JULA & Nicoleta JULA, 2018. "Structural Breaks in Potential GDP for Romanian Economy," Computational Methods in Social Sciences (CMSS), "Nicolae Titulescu" University of Bucharest, Faculty of Economic Sciences, vol. 6(1), pages 23-41, June.
    • Handle: RePEc:ntu:ntcmss:vol6-iss1-23-41
    as

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    References listed on IDEAS

    as
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