Using Grey Production Functions in the Macroeconomic Modelling: An Empirical Application for Romania

The work is a development of our earlier studies containing empirical application of models with representative agent. The extensions developed in this paper consist of the following: the introduction of the labor market via the use of labor as the second production factor, the use of the GM(1,1) algorithm in order to adjust the capital and labor data series and to compute grey Cobb-Douglas production function, and finally the comparison of the results obtained applying the model to the actual data and the grey data. The grey production function is estimated using GM(1,1) adjusted statistical series of the GDP, capital stock and labor data. For the two vari-ants we computed the predictions of the indicators: real GDP, consumption, government ex-penditures, trade balance, and burden of debt.