PRODUCCIÓN POTENCIAL Y BRECHA DE PRODUCCIÓN EN CENTRO AMÉRICA, PANAMÁ Y LA REPÚBLICA DOMINICANA (CAPRD).

Potential Output is a key factor for debt sustainability analysis and for developing strategies for growth, but unfortunately it is an unobservable variable. Using three methodologies (production function, switching, and state-space), this paper computes potential output for CAPDR countries using annual data. Main findings are: i) CAPDR potential growth is about 4.4% while output gap volatility is about 1.9%; it) the highest-potential growth country is Panama (6.5 percent) while the lowest-growth country is El Salvador (2.6 percent); Hi) CAPDR business cycle is about eight years. [ABSTRACT FROM AUTHOR]