Effects of the Global and Domestic Business and Economic Factors on Aggregate Output in Austria

Abstract

Based on a quarterly sample during 2003.Q1 – 2015.Q1, this paper finds that Austria’s aggregate output is positively affected by the lagged German or U.S. output, the real oil price and labor productivity and is negatively influenced by real effective exchange rate appreciation, the real lending rate, central government debt as a percent of GDP and the expected inflation rate. Hence, a rising oil price would not harm aggregate output, and recent depreciation of the euro would be beneficial to aggregate output.