The Potential Output Estimation Of Industry In Guizhou Province

Potential output refers that, at a reasonable price level, or no acceleration of inflation, the maximum output current of capital, labor and technology can be achieved. Policy-makers can get more accurate outcome, if a region’s potential output estimate accurately, for local economic development strategy. Therefore, in the industrial development of Guizhou increasingly development, the potential output of industrial output gap measure for Guizhou Province has a very important role.This paper summarizes the theory and related outcomes of potential output and the output gap, the calculation method for various, and analyzes the advantages and disadvantages and applicability. Then we, considering the actual development of Guizhou Province industry, select the methods and models used. Through discussion, the eventual adoption of the stochastic frontier production function method for 1997 to 2013 in Guizhou Province Industry estimated potential output. Then, based on estimates of the main factors of capital, labor, and other factors,we try to grasp the basic direction of industrial development in Guizhou Province. Through this study, it is possible to formulate relevant industrial policies to provide guidance on the basis of Guizhou Province.Through research, the paper obtained the following findings :( a) Guizhou Province has been in industrial output gap which bellows the level of potential output. The overall trend shows the amount of potential output and narrowing trend. In 2013, the output gap and the actual output are almost the same.(b) Industrial development in Guizhou Province between 1997-2009 showing relatively depressed state, which is the overall level of economic development, but also on the basis of industrial development in Guizhou province weak related. After 2010, due to the implementation of Guizhou Province to develop the good momentum of economic development and industrial policy is the industry’s rapid economic development in Guizhou Province.(c) In the past years, Guizhou province depended on capital investment and market-oriented mainly to push the industry economy development. Labor and R&D did not show their power in this development...