potential output estimation and empirical examination methods in iran (1961-1998)

one of the most important economic factors is potential output. in macroeconomic models and structural studies, the estimation of potential output is necessary for projections and analyzing policy performances. there exist several methods for estimating potential output. meanwhile, its estimation is a difficult and complicated matter. empirical studies and researches show that using various techniques and methods in estimating potential output leads to different estimations. in the present study, the different methods of estimating potential output are reviewed. then potential output of iran within 1961-1998 is estimated by four methods: time trend, hodrick-prescott filtering, state space and var. the comparison of iran potential output estimation results shows that although estimation results are different, they are very similar to each other. among these four estimation methods, var and state space techniques show better results respectively.