OECD Economics Department Working Papers

ISSN :
1815-1973 (en ligne)
DOI :
10.1787/18151973
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Working papers from the Economics Department of the OECD that cover the full range of the Department’s work including the economic situation, policy analysis and projections; fiscal policy, public expenditure and taxation; and structural issues including ageing, growth and productivity, migration, environment, human capital, housing, trade and investment, labour markets, regulatory reform, competition, health, and other issues.
 

The GDP Impact of Reform

A Simple Simulation Framework You or your institution have access to this content

Auteur(s):
Sebastian Barnes1, Romain Bouis1, Philippe Briard1, Sean Dougherty1, Mehmet Eris1
Author Affiliations
  • 1: OCDE, France

Date de publication
18 jan 2011
Bibliographic information
N°:
834
Pages
49
DOI
10.1787/5kgk9qjnhkmt-en

Cacher / Voir l'abstract

This paper presents a framework to assess the impact of a wide range of structural policy reforms on GDP per capita at various horizons by linking together previous empirical studies mostly carried out by the OECD. The simple accounting framework consists of reduced-form equations and offers a more tractable and realistic alternative to an estimated general equilibrium model. This comes at the expense of several potential shortcomings including inter alia insufficient account of interrelationships between policies or spillover effects, risks of double-counting the effects of certain reforms, endogeneity issues and the omission of interactions across different policy areas. Bearing these caveats in mind, the plausible scenarios suggest that the largest long-run GDP per capita gains may be obtained from reforms that would raise the quantity and quality of education, strengthen competition in product markets, reduce the level and/or duration of unemployment benefits, cut labour tax wedges and relax employment protection legislation. Past reforms in these areas might also have contributed to as much as half of GDP per capita growth in OECD countries in the decade prior to the recent financial and economic crisis. Simulations further indicate that addressing all policy weaknesses in each OECD country by aligning policy settings on the OECD average could raise GDP per capita by as much as 25% in the typical country.
Mots-clés:
productivity, structural reforms, growth, employment
Classification JEL:
  • E27: Macroeconomics and Monetary Economics / Macroeconomics: Consumption, Saving, Production, Employment, and Investment / Forecasting and Simulation: Models and Applications
  • O43: Economic Development, Technological Change, and Growth / Economic Growth and Aggregate Productivity / Institutions and Growth
  • O47: Economic Development, Technological Change, and Growth / Economic Growth and Aggregate Productivity / Measurement of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence