Estimates Of Russia’s Potential Output
Articles
Martin Janíčko
University of Economics and Business in Prague, Czech Republic
Petr Maleček
Faculty of Economics, University of Business and Economics in Prague, Czech Republic
Pavel Janíčko
College of Regional Development and the Banking Institute – AMBIS, Czech Republic
Published 2021-10-08
https://doi.org/10.15388/Ekon.2021.100.2.4
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Keywords

Russian economy
potential output
production function
Hodrick-Prescott filtering
Kalman filtering

How to Cite

Janíčko M., Maleček P. and Janíčko P. (2021) “Estimates Of Russia’s Potential Output ”, Ekonomika, 100(2), pp. 84-100. doi: 10.15388/Ekon.2021.100.2.4.

Abstract

Taking into consideration the specifics of the Russian economy such as dependency on oil and gas drilling & production, and including the current context of the Western sanctions, COVID-19 pandemic, as well as somewhat idiosyncratic potential output development, the main aim of this paper is to quantify recent output gap for Russia. We use three mainstream methodologies: the Hodrick-Prescott filter as a benchmark, the Kalman filter to follow, and the Cobb-Douglas production function. The sample time span ranges from 1995Q1 until 2020Q3, while all calculations are performed on quarterly frequencies. The analysis suggests that given low fixed investment ratios, limited R&D spending in non-military sectors, and adverse demographic development, under a “no policy change” scenario there might soon be even more downward pressures on the country’s potential output growth, and the economy may continue increasing only at a snail’s pace even after a possible withdrawal of the Western sanctions and the end of the COVID-19 pandemic.

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