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The potential product plays an essential role in the design and evaluation of an economic policy, and although the results obtained through the management of monetary and fiscal policy depend to a large extent on having reliable estimates, there is no consensus on the methodology of most appropriate...
The potential product plays an essential role in the design and evaluation of an economic policy, and although the results obtained through the management of monetary and fiscal policy depend to a large extent on having reliable estimates, there is no consensus on the methodology of most appropriate estimate. This paper intends to contribute to this discussion for the Argentine case, making an estimate of the potential product through the structural method of the production function, considering two productive factors, labor and capital, combined through a Cobb-Douglas technology. The estimate is made using the VECM approach, and the estimated potential product is applied to the calculation of the output gap for Argentina.
