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Guatemala :, Selected Issues and Analytical Notes

This Selected Issues note estimates Guatemala’s potential output and output gap using the production function approach, univariate statistical filters, and multivariate models based on the Kalman filter method. In the production function approach, potential output is modeled as a function of potential labor and capital inputs, and total factor productivity (TFP). Results are robust to different methodologies and suggest that its potential output growth is about 3.5 percent and the output gap is on average closed. Structural breaks in potential output were identified in 1994, 2003, and 2008, which coincide to the Mexican tequila crisis, the free trade agreement with the US, and the financial crisis. Going forward, it is critical to undertake structural reforms to strengthen capital, labor, and TFP growth in order to accelerate potential growth. Univariate statistical methods provide a simple measure of potential output. The production function approach also indicates that the absence of productivity growth is a significant barrier to potential output growth
Table Of Contents
Cover; CONTENTS; ASSESSING POTENTIAL OUTPUT; Figures; 1. Potential Output and Output Gap 1991-2019; 2. Potential Output and Output Gap; References; CROSS-BORDER LINKAGES AND SPILLOVERS.; A. Trade Linkages; B. Real Growth Spillovers; C. Fiscal Spillovers; D. Financial Spillovers; Figures; 1 Guatemala: Trade Linkages; 2. Central America and Selected Trading Partners: Correlations of Annual Real GDP Growth, 1975-2013; 3. Guatemala, Costa Rica, and Selected Trading Partners: Real Growth Spillovers; References; THE EFFECT OF U.S. TAPERING; A. Empirical Approach
Literary Form
non fiction
Description based upon print version of record
Physical Description
1 online resource (49 p.)
Specific Material Designation
Form Of Item

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