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Estimating Sri Lanka’s Potential Output

Author

Listed:
  • Ding Ding
  • John Nelmes
  • Roshan Perera
  • Mr. Volodymyr Tulin

Abstract

In this paper we present various techniques to estimate Sri Lanka’s potential output and output gap, including statistical and model-based approaches. Compared to conventional statistical filters that rely exclusively on information in a single series, the model-based approaches allow potential output estimates to incorporate information contained in observable data series including inflation, actual output, unemployment and capacity utilization. The estimation results suggest that Sri Lanka’s potential output has risen slightly in the last few years.

Suggested Citation

  • Ding Ding & John Nelmes & Roshan Perera & Mr. Volodymyr Tulin, 2014. "Estimating Sri Lanka’s Potential Output," IMF Working Papers 2014/040, International Monetary Fund.
    • Handle: RePEc:imf:imfwpa:2014/040
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    References listed on IDEAS

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    1. Souvik Gupta & Mr. Magnus Saxegaard, 2009. "Measures of Underlying Inflation in Sri Lanka," IMF Working Papers 2009/167, International Monetary Fund.
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    4. Harvey, A C & Jaeger, A, 1993. "Detrending, Stylized Facts and the Business Cycle," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 8(3), pages 231-247, July-Sept.
    5. Mr. Jaromir Benes & Mr. Papa M N'Diaye, 2004. "A Multivariate Filter for Measuring Potential Output and the NAIRU Application to the Czech Republic," IMF Working Papers 2004/045, International Monetary Fund.
    6. Ms. Nombulelo Braiton, 2007. "Sri Lanka’s Sources of Growth," IMF Working Papers 2007/225, International Monetary Fund.
    7. International Monetary Fund, 2010. "Estimating Potential Output with a Multivariate Filter," IMF Working Papers 2010/285, International Monetary Fund.
    8. Ding Ding & Rahul Anand & Mr. Shanaka J Peiris, 2011. "Towards Inflation Targeting in Sri Lanka," IMF Working Papers 2011/081, International Monetary Fund.
    9. Ms. Sweta Chaman Saxena & Ms. Valerie Cerra, 2000. "Alternative Methods of Estimating Potential Output and the Output Gap: An Application to Sweden," IMF Working Papers 2000/059, International Monetary Fund.
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    11. Chantal Dupasquier & Alain Guay & Pierre St-Amant, 1997. "A Comparison of Alternative Methodologies for Estimating Potential Output and the Output Gap," Staff Working Papers 97-5, Bank of Canada.
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    Cited by:

    1. Nepal Rastra Bank, 2017. "Potential Output and Output Gap Estimates for Nepal," NRB Economic Review, Nepal Rastra Bank, Economic Research Department, vol. 29(2), pages 1-14, October.

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