The Output Gap and Potential Output in Namibia

  • Emmanuel Ziramba University of Namibia, Pionierspark, Windhoek, Namibia
  • Bernie Zaaruka University of Namibia, Pionierspark, Windhoek, Namibia
  • Johanna Mumangeni University of Namibia, Pionierspark, Windhoek, Namibia
  • Charlotte Tjeriko University of Namibia, Pionierspark, Windhoek, Namibia
  • Jaungura Kaune University of Namibia, Pionierspark, Windhoek, Namibia
DOI: https://doi.org/10.22610/jebs.v11i5(J).2967
Keywords: Output gap, Potential output, Namibia.

Abstract

The study analysed the behaviour of potential output and output gap for the Namibian economy
using annual data from 1980 to 2016. The study employed the Hodrick-Prescott (HP) filter method and the
production function approaches to estimate potential output before calculating the output gap. The results
suggest an annual average growth rate of 3.6 percent in potential output. However, it has been noted that the
average annual growth rate in potential output has been shifting during the period under review. In fact, the
results suggest an annual average growth rate of 1.6 percent between 1980 and 1985 and an increase to 2.5
percent per year for the period 1986 to 1990. Potential output estimates obtained using the production
function approach was smooth and stable throughout the study period. The potential output estimates
obtained through the two methods follow the same cyclical movements. The output gap estimates from the
two techniques are not different from each other, and they appear to move together.

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Published
2019-12-09
How to Cite
Emmanuel Ziramba, Bernie Zaaruka, Johanna Mumangeni, Charlotte Tjeriko, & Jaungura Kaune. (2019). The Output Gap and Potential Output in Namibia. Journal of Economics and Behavioral Studies, 11(5(J), 69-75. https://doi.org/10.22610/jebs.v11i5(J).2967
Issue
Vol 11 No 5(J) (2019)
Section
Research Paper

Copyright (c) 2019 Emmanuel Ziramba, Bernie Zaaruka, Johanna Mumangeni, Charlotte Tjeriko, Jaungura Kaune

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