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Potential Output in the Czech Republic: A Production Function Approach

Author

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  • Jaromír Hurník
  • David Navrátil

Abstract

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.

Suggested Citation

  • Jaromír Hurník & David Navrátil, 2005. "Potential Output in the Czech Republic: A Production Function Approach," Prague Economic Papers, Prague University of Economics and Business, vol. 2005(3), pages 253-266.
    • Handle: RePEc:prg:jnlpep:v:2005:y:2005:i:3:id:265:p:253-266
    DOI: 10.18267/j.pep.265
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    References listed on IDEAS

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    Cited by:

    1. Dana Hajkova, 2008. "The Measurement of Capital Services in the Czech Republic," Working Papers 2008/11, Czech National Bank.
    2. repec:cnb:ocpubv:rb06/1 is not listed on IDEAS
    3. repec:cnb:ocpubv:rb05/2 is not listed on IDEAS
    4. Jaromír Hurník & Dana Hájková, 2007. "Supply-Side Performance in the Czech Republic: A Macroeconomic View (1995-2005)," Prague Economic Papers, Prague University of Economics and Business, vol. 2007(4), pages 319-335.

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    More about this item

    Keywords

    capital stock; potential output; production function; NAIRU; total factor productivity;
    All these keywords.

    JEL classification:

    • E23 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Production
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

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