Assessing potential output growth of the Maltese economy using a production function approach (2015)

Aaron G Grech & Brian Micallef


After outlining the various methods used to estimate potential output, this article presents estimates for Malta, the smallest member of the euro area, derived from one of the most commonly used methods, the production function approach. Given the uncertainty surrounding these kinds of estimates, these estimates are compared with those made for Malta by other institutions using different methods. Based on this analysis and on a cross-country comparison with other euro area economies, a number of observations are made that would enable potential growth to accelerate and result in a faster economic convergence.

Xjenza (2015), Volume 3, Issue 1, pp. 57-63, DOI: 10.7423/XJENZA.2015.1.08