Abstract
In this paper, we present international comparisons of potential output growth among several economies—Canada, the euro area, France, Germany, Italy, Japan, the Netherlands, the United Kingdom, and the United States—for the period 1991–2004, for which we construct consistent and homogenous capital stock series. The main estimates rely on a structural approach where output of the whole economy is described by a Cobb–Douglas function and Total Factor Productivity (TFP) is estimated allowing for possible breaks in the deterministic trend. The results confirm that over the considered period the potential gross domestic product growth has been faster in the United States than in other studied countries, reflecting a combination of higher labour contribution and faster TFP growth. Overall, this paper might help to shed some light on cross-country differences in economic performance over the recent period.
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We thank two anonymous referees. A previous version of this article received valuable comments from Philippe Aghion, Susanto Basu, Gilbert Cette, Don Coletti, Jean-Pierre Villetelle, the Editorial Board and one anonymous referee of the ECB Working Paper series, as well as participants at various seminars including workshop at Banque de France and the conference on “Perspectives on Potential Output and Productivity Growth” initiated by Bank of Canada and Banque de France held at Enghien-les-Bains, France, on April the 24th & 25th 2006. We are also very grateful to Anne-Christèle Chavy-Martin, Valérie Vogel, and Béatrice Rouvreau for research assistance. Finally, we are indebted to François Lequiller and Arnaud Sylvain for providing valuable data, as well as Hervé le Bihan for providing his codes, but we retain sole responsibility for any remaining errors. The views expressed herein are those of the authors and do not necessarily reflect those of the European Central Bank nor those of the Banque de France.
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Cahn, C., Saint-Guilhem, A. Potential output growth in several industrialised countries a comparison. Empir Econ 39, 139–165 (2010). https://doi.org/10.1007/s00181-009-0298-2
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DOI: https://doi.org/10.1007/s00181-009-0298-2