Forecasting the Economic Growth in Romania with the Cobb–Douglas Production Function

Abstract

The Cobb-Douglas production function is an important analysis tool that is used to characterize the supply side of the Romanian economy capacity, from 2000-to 2017, and to forecast the future tendency of economic growth for the next two years. The study comprises two approaches to Romanian economy forecasting. One approach consists of building two scenarios, one optimistic and another pessimistic, based on the target output of IMF experts’ opinions. We compared these scenarios of the results for three sub-periods and for the entire analysed period. Another approach was to compound the separate forecasts of factors. The results proved to be consistent between the two approaches, as well as regarding the historical data.