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Using an Okun's law framework, the analysis here estimates potential growth for the 1990s as measured by both fixed‐ and chain‐weighted GDP. It then decomposes estimated potential growth rates into labor productivity growth (LPG) and labor input growth (LIG) using a regression analysis to separate secular from cyclical changes. It compares estimates of potential output and trend productivity growth for the 1990s with estimates from earlier periods. Results indicate that eliminating the substitution bias associated with fixed‐weight measures of real GDP raises estimated potential GDP growth in the 1980s but lowers it in the 1990s. A slowdown in labor force growth, with little or no change in long‐term productivity growth, largely accounts for the implied slowdown in potential growth.

Cover -- Contents -- I. Introduction -- II. Estimating Potential Growth -- A. Methodology and Data -- B. Results -- C. Robustness Tests -- III. Decomposing Potential Growth -- IV. Prospects for Raising Potential Growth -- V. Conclusions -- Bibliography -- Appendix -- I. Methodology -- A. Statistical Filters -- B. Production Function Approach -- Appendix Tables -- 1a. Robustness of Potential Growth Estimates (in percent): Varying HP Filter Assumptions -- 1b. Robustness of Potential Growth Estimates (in percent): Varying of Filter Assumptions -- 1c. Robustness of Potential Growth Estimates (in percent): Varying of Filter on Capital's Share of Output and Its Depreciation Rate -- 1d. Robustness of Potential Growth Estimates (in percent): Varying of Production Filter.

Background: The shrinkage of working age population at ages between 15 and 59 after 2010 will end the era of the high-speed economic growth in China. This paper is intended to explore the ways of tackling this slowdown. Methods: By revealing annual growth rate of potential output to drop to 7.2 % in 2011-2015 and 6.1 % in 2016-2020, this paper is to explain the cause of growth rate deceleration and draw policy implications of such slowdown. Results: First, the government should not seek a growth rate above potential rate if they do not intend to see distortions in the economy such as macroeconomic instability, overcapacity, deviation from comparative advantage, and protection of inefficient firms. Second, the potential growth rate can be strengthened through institutions building and reorientation of public policy in various areas in order to spur labor mobility and productivity improvement. Conclusions: This paper suggests to deepen economic reform in order to sustain the necessarily high growth rate of the Chinese economy.

I discuss a dynamic version of the Zodrow-Miezskowski model, where world capital supply is not fixed. The time horizon of the welfare maximizing government is assumed to be infinite whereas the household sector is designed according to the two-period overlapping-generations model. Thus social evaluation is involved which is not directly based on individual preference ordering. The model produces a type of inefficiency caused by a head tax on immobile workers. From the viewpoint of the global economy, head taxes reduce global saving and thus create a negative externality on global capital supply. The lower-level government thus financed the public goods supply with too little reliance on source taxes. In this case, centralization of investment decisions has the potential of welfare improvement. It can lead to an increase in private and public investment and enhances transitory growth

Both the professional literature and non-academic resources are replete with references to both thesuccesses and failures of the current state of education. There is very little doubt that education isreceiving intense scrutiny from a variety of sources and in regard to numerous aspects of itsimplementation. A primary focus of this examination has been the teacher work force, specifically itseffectiveness in promoting measurable student growth and achievement. While this is a natural andimperative center of the investigation, it also encompasses ancillary issues, such as the manner inwhich the teachers are prepared to assume their instructional roles, and to what extent they arecontinuing to augment their professional development and effectiveness once they enter the classroomsetting. Issues such as these clearly draw teacher preparation programs at the higher education levelinto the conversation. To address these concerns, conventional teacher education programs arebeing analyzed as to their efficacy and practical application to real world demands.

AbstractEstimates of potential output growth for Australia, the United States and Canada are presented and analysed in this article. We define potential growth as that growth rate consistent with a steady (domestic component of the) inflation rate (SIRG). At around 4 per cent per annum, Australia's SIRG has been relatively stable for the past 30 years, which seems inconsistent with the view that wide‐ranging microeconomic reform in the 1990s raised growth potential. However, we show that the reduction in employment growth in Australia from the 1980s to the 1990s may account for the absence of a rise in potential growth. In Canada and the United States the SIRGs are closer to 3 per cent, and we explore the reasons why potential growth estimates are higher for Australia than for North America. We also discuss why Australia's growth averaged less than its potential in the 1980s and 1990s and the possible use of our estimates for monetary policy purposes.

In sharp contrast with the buoyant economic dynamism observed in most other areas of the world, slow growth and persistently high unemployment have been characterizing the European Union (EU) economy for a number of years. This report investigates some of the possible causes of this poor macroeconomic performance, analyzing in depth the hypotheses of technological backwardness and of inappropriate economic policies, as major determinants of potential growth. It then proposes some contrasted scenarios for economic and social policies in the EU and explores, with the help of the INGENUE, overlappinggenerations, general-equilibrium model of the world economy, some of the possible long-termevolutions of economic growth and other macroeconomic indicators for various scenarios. In particular, we look at the aggregate economic consequences over the next decades of various ways in which the combination of policies being implemented and the recent enlargement of the European Union may affect the growth potential of the area. More specifically, among the many possible changes that may be forthcoming with this new EU enlargement, we simulate the changes in the time-path of macroeconomic variables resulting from the achievement of the "Lisbon strategy" objective of higher employment rates in the EU, from faster technological convergence of Eastern European economies towards Western European levels of total factor productivity (TFP), and from larger migration flows from Eastern European new members to the EU-15 countries. Although the consequences may in some cases be quite large for the enlarged EU economy, the induced effects on the rest of the world are, in all cases, relatively small, due to the small weight of Eastern Europe in the world economy and population.

In sharp contrast with the buoyant economic dynamism observed in most other areas of the world, slow growth and persistently high unemployment have been characterizing the European Union (EU) economy for a number of years. This report investigates some of the possible causes of this poor macroeconomic performance, analyzing in depth the hypotheses of technological backwardness and of inappropriate economic policies, as major determinants of potential growth. It then proposes some contrasted scenarios for economic and social policies in the EU and explores, with the help of the INGENUE, overlappinggenerations, general-equilibrium model of the world economy, some of the possible long-termevolutions of economic growth and other macroeconomic indicators for various scenarios. In particular, we look at the aggregate economic consequences over the next decades of various ways in which the combination of policies being implemented and the recent enlargement of the European Union may affect the growth potential of the area. More specifically, among the many possible changes that may be forthcoming with this new EU enlargement, we simulate the changes in the time-path of macroeconomic variables resulting from the achievement of the "Lisbon strategy" objective of higher employment rates in the EU, from faster technological convergence of Eastern European economies towards Western European levels of total factor productivity (TFP), and from larger migration flows from Eastern European new members to the EU-15 countries. Although the consequences may in some cases be quite large for the enlarged EU economy, the induced effects on the rest of the world are, in all cases, relatively small, due to the small weight of Eastern Europe in the world economy and population.