No 46-2025, I. Sobiech Pellegrini: Revising potential: major revisions to EUCAM growth projections and their underlying drivers
This paper analyzes revisions to potential GDP estimates for EU member states using the European Commission's commonly agreed methodology (EUCAM) between autumn 2019 and autumn 2024 amid an unprecedented series of shocks. Using Poland as a detailed case study, we demonstrate that the methodology exhibits counterintuitive properties and is sensitive to end-point observations, creating a procyclical bias in estimates. Findings from the article highlight fundamental challenges in production function approaches during periods of structural change and raise questions about their appropriateness for policy guidance.
Materials
MF Working Papers No 46-2025MF_WP_No_462025_EN.pdf 0.81MB