Terms of trade and potential output in Argentina
This paper uses an equilibrium correction model to estimate Argentina´s potential output in the 1913-2011 period. The long-term equilibrium is represented by an aggregate Cobb-Douglas production function with three factors: capital, labor and land. Capital and labor inputs have been adjusted by qual...
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| Formato: | article |
| Lenguaje: | Inglés |
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2020
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| Acceso en línea: | http://hdl.handle.net/11086/16750 |
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| Sumario: | This paper uses an equilibrium correction model to estimate Argentina´s potential output in the 1913-2011 period. The long-term equilibrium is represented by an aggregate Cobb-Douglas production function with three factors: capital, labor and land. Capital and labor inputs have been adjusted by quality; and the terms of trade have been exogenously introduced, as we assume they affect the quality of land. The estimated shares of capital, labor and land are 0.44, 0.46 and 0.10 respectively, and test do no reject the proposed hypothesis that the terms of trade coefficient equals the share of land. The output gap after Convertibility is analyzed and forecasts have been made about potential output growth. |
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