A Small Model for Output Gap and Potential Growth Estimation. An Application to Bulgaria
A Small Model for Output Gap and Potential Growth Estimation. An Application to Bulgaria

Summary/Abstract: This paper presents the logic and structure of a small and parsimonious macroeconometric model designed for output gap and potential growth estimation in a data-poor environment. Such results can be useful in calculating the cyclically adjusted budget balances which are a key indicator for fiscal policies design in the framework of the EU Stability and Growth Pact. Empirical results using Bulgarian data are also included for llustrative purposes.

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