WP/10/07 The Impact of the Crisis on the Prospects for Long-Term Growth in Belarus
This study examines the impact of the crisis and the anti-crisis economic policy in Belarus on long-term growth prospects. At the theoretical level, we have identified a number of potential channels, which can be associated with lower growth of the potential GDP. Based on the analysis of the features of the economic policy and the economy in times of crisis, we came to the conclusion that government actions prevented a number of crisis adjustments, which are important for long-term economic growth. Using different methods to assess the potential level of GDP – Hodrick-Prescott filter, Kalman filter, and the methodology of the production function – we came to the conclusion that the crisis slowed down significantly the rate of potential GDP growth. This suggests a rather high risk of reduction in the rate of long-term economic growth.