1887

OECD Economics Department Working Papers

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 views expressed in these papers are those of the author(s) and do not necessarily reflect those of the OECD or of the governments of its member countries.

English, French

Estimating a Supply Block for Poland

The supply-side framework and related measures of output and unemployment gaps play a leading role in the OECD analysis of short-term conjunctural conditions and long-term determinants of growth. To allow such diagnoses for Poland, this paper develops a comprehensive supply block in accordance with the OECD approach. The structural unemployment rate is derived from a Phillips-curve equation and, along with working age population, is combined with filter-based estimates of trend labour productivity, participation rates and hours worked per employee to generate measures of potential output. The performance of the model in capturing price pressures underlying the growth trajectory of the Polish economy is assessed, and measures of cyclically-adjusted general government net lending are provided. Based on the OECD autumn 2007 projections for 2008 and 2009, out-of-sample simulations derived from the Phillips-curve model suggest that CPI inflation is likely to continue to trend upward, exceeding the central bank?s inflation target by a wide margin.

English

Keywords: medium-term projections, OECD, macroeconomic modelling, structural budget deficit, potential output, production function, transition economies, Poland
JEL: E23: Macroeconomics and Monetary Economics / Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy / Macroeconomics: Production; E52: Macroeconomics and Monetary Economics / Monetary Policy, Central Banking, and the Supply of Money and Credit / Monetary Policy; C53: Mathematical and Quantitative Methods / Econometric Modeling / Forecasting Models; Simulation Methods; E27: Macroeconomics and Monetary Economics / Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy / Macroeconomics: Consumption, Saving, Production, Employment, and Investment: Forecasting and Simulation: Models and Applications; P24: Economic Systems / Socialist Systems and Transitional Economies / Socialist Systems and Transitional Economies: National Income, Product, and Expenditure; Money; Inflation; E22: Macroeconomics and Monetary Economics / Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy / Investment; Capital; Intangible Capital; Capacity
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