gapProd {RGAP}

Production function output gap

Description

Computes potential output and the output gap based on a production function methodology.

Usage

gapProd(
  tsl,
  NAWRUfit,
  TFPfit,
  alpha = 0.65,
  start = NULL,
  end = NULL,
  lambda = NULL
)

Arguments

tsl

A list of time series objects, see details.

NAWRUfit

An object of class NAWRUfit obtained via the function fit.

TFPfit

An object of class TFPfit obtained via the function fit.

alpha

A scalar between zero and one depicting the labor share. The default is alpha = 0.65.

start

(optional) A two element vector containing a year and a period specifying the start point for the estimation.

end

(optional) A two element vector containing a year and a period specifying the end point for the estimation.

lambda

The smoothing parameter for the application of the HP filter (see details). If not supplied, lambda = 6.25 for yearly data, lambda = 1600 for quarterly data, and lambda = 129600 for monthly data.

Details

The list of time series tsl needs to have the following components:

lfnd

Labor force non-domestic (unit: 1000 persons). (Set to zero if left unspecified).

parts

Participation rate.

ahours

Average hours worked (unit: hours).

gdp

Gross domestic product at constant prices (unit: bn National currency, code: OVGD).

k

Net capital stock at constant prices: total economy (unit: bn National currency, code: OKND).

popw

Population: 15 to 64 years (unit: 1000 persons, code: NPAN).

The trend of the list components parts, ahours and lfnd (if available) is computed using the Hodrick-Prescott filter with the smoothing constant lambda, unless the supplied time series list tsl contains their trend (for instance, denoted by partsTrend).

Value

Object of class gap, which is a list with the following components:

tsl

List of time series including potential output potential, the output gap gap, all HP-filtered trend series, and all original series.

NAWRUfit

Provided NAWRUfit object.

TFPfit

Provided TFPfit object.

call

Original call to the function.

Examples

# compute the output gap given the previously obtained nawru and trend tfp
data("gap")
country <- "Belgium"
tsList <- amecoData2input(gap[[country]])
modelNAWRU <- NAWRUmodel(tsl = tsList)
modelTFP <- TFPmodel(tsl = tsList, cycle = "RAR2")


fittedNAWRU <- fit(model = modelNAWRU)
fittedTFP <- fit(model = modelTFP)

gapProd(tsl = tsList, NAWRUfit = fittedNAWRU, TFPfit = fittedTFP)