Тузувчи : Файзуллаева Н

Step 4. We next adjust potential (full-employment) GDP in the GI model to be consistent with CBO’s medium-term projections of the rates of growth in potential GDP and the potential labor force.44

We use the GI control forecast as a starting point. CBO does not regularly publish levels-estimates of either potential GDP or the potential labor force.45 We therefore adjust the projected levels of both variables in the control forecast to be consistent with CBO’s published growth rate projections. We apply CBO’s projections of the growth rate of the potential labor force directly, adjusting the projected level of the potential labor force in the control forecast. We target the growth rate of potential GDP only indirectly, adjusting among other variables the exogenous trend in total factor productivity in the control forecast.