Estimation of the potential product and the product gap, for Argentina: approximations from a multivariate filter and the production function method

Working papers | 2018 | N 80

Abstract

In this work, three methodologies are presented and implemented for estimating potential output and the output gap in Argentina, in the period 1993Q1-2018Q1. The first rests on the estimation, by Bayesian techniques, of a multivariate semi-structural filter based on the study by Benes et al. (2010). Secondly, the calculation is carried out using univariate filters: the Hodrick Prescott and two versions of Band Pass in the frequency domain (Baxter-King and Christiano-Fitzgerald). The aforementioned estimates emphasize the short-term cyclical behavior of the product, consistent with a stable inflation rate. Likewise, an estimate is prepared through the production function method, a perspective that is more appropriate for the analysis of the use of productive factors in a long-term horizon. With this last objective, a growth accounting exercise is carried out. The results of the different methodologies for estimating the potential product show robustness among themselves and allow us to account for some stylized facts from the economic literature about the period of analysis.

JEL classification: C32, E13, E30, E52, O40