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Estimating Potential GDP for the Romanian Economy. An Eclectic Approach

Author

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  • Moisa, Altar

    (DOFIN, Academy of Economic Studies, Bucharest; Center for Advanced Research in Finance and Banking (CARFIB); Centrul de Analiza si Prognoza Economico-Financiara (CAPEF))

  • Necula, Ciprian

    (DOFIN, Academy of Economic Studies, Bucharest; Center for Advanced Research in Finance and Banking (CARFIB); Centrul de Analiza si Prognoza Economico-Financiara (CAPEF))

  • Bobeica, Gabriel

    (DOFIN, Academy of Economic Studies, Bucharest; Center for Advanced Research in Finance and Banking (CARFIB); Centrul de Analiza si Prognoza Economico-Financiara (CAPEF))

Abstract

The paper provides potential output and output gap estimates for the Romanian economy in the period 1998-2008. Our approach consists in combining the production function structural method with several statistical de-trending methods. The contribution of our analysis to the scarce literature dealing with the estimation of the cyclical position of the Romanian economy is twofold. First, we identify the contribution of the production factors to the potential output growth. Second, we aggregate the results obtained through filtering techniques in a consensus estimate, ascribing to each method a weight inversely related to its revision stability. The results suggest for the period 2001-2008 an average annual growth rate of the potential output equal to 5.8%, but on a descending slope, due to the adverse developments in the macroeconomic context.

Suggested Citation

  • Moisa, Altar & Necula, Ciprian & Bobeica, Gabriel, 2010. "Estimating Potential GDP for the Romanian Economy. An Eclectic Approach," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 0(3), pages 5-25, September.
    • Handle: RePEc:rjr:romjef:v::y:2010:i:3:p:5-25
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    References listed on IDEAS

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    Cited by:

    1. Dorin Mantescu & Dan-Tudor Lazar, 2014. "Estimation of Potential GDP and output Gap. Comparative Perspective," The AMFITEATRU ECONOMIC journal, Academy of Economic Studies - Bucharest, Romania, vol. 16(37), pages 951-951, August.
    2. Mădălin Viziniuc, 2017. "Potential Gains from Cooperation Between Monetary and Macroprudential Policies: The Case of an Emerging Economy," Eastern European Economics, Taylor & Francis Journals, vol. 55(5), pages 420-452, September.
    3. Altar, Moisa & Necula, Ciprian & Bobeica, Gabriel, 2010. "Estimating The Cyclically Adjusted Budget Balance For The Romanian Economy. A Robust Approach," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 0(2), pages 79-99, July.
    4. Dan Armeanu & Georgiana Camelia Crețan & Leonard Lache & Mihaela Mitroi, 2015. "Estimating Potential GDP for the Romanian Economy and Assessing the Sustainability of Economic Growth: A Multivariate Filter Approach," Sustainability, MDPI, vol. 7(3), pages 1-21, March.
    5. Nicoleta Georgeta Panait, 2016. "The Influence of Foreign Direct Investments on Business Environment in Romania," Global Economic Observer, "Nicolae Titulescu" University of Bucharest, Faculty of Economic Sciences;Institute for World Economy of the Romanian Academy, vol. 4(2), pages 86-91, November.
    6. Moisă ALTĂR & Ana-Maria CAZACU, 2016. "Testing Self-Selection And Learning By Exporting Hypotheses. The Case Of Romania," ECONOMIC COMPUTATION AND ECONOMIC CYBERNETICS STUDIES AND RESEARCH, Faculty of Economic Cybernetics, Statistics and Informatics, vol. 50(1), pages 5-22.
    7. Monica Pop Silaghi & Diana Alexa, 2015. "Sources of Growth: Evidence from Ten Central and Eastern European Countries during 1993-2008," Panoeconomicus, Savez ekonomista Vojvodine, Novi Sad, Serbia, vol. 62(5), pages 643-661, December.
    8. Mihaela, Simionescu, 2020. "Improving unemployment rate forecasts at regional level in Romania using Google Trends," Technological Forecasting and Social Change, Elsevier, vol. 155(C).
    9. Stanica, Cristian Nicolae, 2013. "Using a Macroeconomic Model to Check Forecast Consistency," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 0(1), pages 119-135, March.
    10. Emilian DOBRESCU, 2021. "Potential Output: A Market Conditionalities Interpretation," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 0(4), pages 5-38, December.
    11. 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.
    12. Andrei, Dalina Maria, 2012. "Foreign Direct Investments in Romania. A Structural and Dynamic View," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 0(4), pages 129-146, December.
    13. Stanica, Cristian Nicolae, 2011. "Modeling Government Policies used for Sustaining Economic Growth in Romania," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 0(4), pages 90-105, December.
    14. Pinilla Barrera, Alejandro & Hurtado Rendón, Álvaro & Velásquez Ceballos, Hermilson, 2024. "Variation Index of the Output Gap (VIOG): A New Way of Testing Potential GDP Estimations," Documentos de Trabajo de Valor Público 2, Universidad EAFIT.
    15. Dan Armeanu & Nicolae Istudor & Leonard Lache, 2015. "The Role of SMEs in Assessing the Contribution of Entrepreneurship to GDP in the Romanian Business Environment," The AMFITEATRU ECONOMIC journal, Academy of Economic Studies - Bucharest, Romania, vol. 17(38), pages 195-195, February.

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    More about this item

    Keywords

    potential GDP; output gap; NAIRU; business cycle;
    All these keywords.

    JEL classification:

    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles

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