ESTIMATING THE OUTPUT GAP FOR ROMANIA’S ECONOMY

Abstract

In this research paper the authors try to estimate Romania’s Output Gap and how the country managed to evolve, from the given chronological perspective, in parallel with the estimated potential Output Gap. Romania started to feel the heat of the economic crisis at almost three quarters after the American economy started its decline, but when it comes to the economy’s Output Gap, the country macro-behaved with a pace somehow differentiated in parallel with the global economy. Where was Romania and where it is heading that is the question that this research paper tries to answer from macroeconomic perspective.

Keywords

• output gap
• GDP
• TFP
• Cobb-Douglas function