Potential GDP Modeling and Output Gap Estimation as a Basis for Countercyclical Fiscal Policy in Kazakhstan


Alpysbaeva S.N. Shuneev S.Z. Zhanakova N.N. Bakdolotov A.A.
July 2021Pleiades journals

Studies on Russian Economic Development
2021#32Issue 4445 - 453 pp.

Abstract: This paper identifies key risks of the public sector in Kazakhstan. Methods for modeling potential output and output gap in international research practice and their application in countercyclical fiscal policy are considered. The potential output of Kazakhstan is retrospectively analyzed using the Hodrick–Prescott (HP) filter. Periods of the procyclical budgetary policy are identified. It is proposed to introduce a fiscal model of the structural budget balance, to target a zero output gap in the short term, and to increase the potential output through structural reforms.

countercyclical fiscal policy , fiscal impulse , fiscal rules , modeling , output gap , potential output

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Economic Research Institute, Nur-Sultan, 010000, Kazakhstan

Economic Research Institute

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