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Author: Ali Alichi
Publisher: International Monetary Fund
ISBN: 1513507567
Category : Business & Economics
Languages : en
Pages : 17
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Book Description
The gap between potential and actual output—the output gap—is a key variable for policymaking. This paper adapts the methodology developed in Blagrave and others (2015) to estimate the path of output gap in the U.S. economy. The results show that the output gap has considerably shrunk since the Great Recession, but still remains negative. While the results are more robust than other existing methodologies, there is still significant uncertainty surrounding the estimates.
Author: Ali Alichi
Publisher: International Monetary Fund
ISBN: 1513507567
Category : Business & Economics
Languages : en
Pages : 17
Get Book Here
Book Description
The gap between potential and actual output—the output gap—is a key variable for policymaking. This paper adapts the methodology developed in Blagrave and others (2015) to estimate the path of output gap in the U.S. economy. The results show that the output gap has considerably shrunk since the Great Recession, but still remains negative. While the results are more robust than other existing methodologies, there is still significant uncertainty surrounding the estimates.
Author: Michal Andrle
Publisher: International Monetary Fund
ISBN: 1484360516
Category : Business & Economics
Languages : en
Pages : 45
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Book Description
This paper discusses several popular methods to estimate the ‘output gap’. It provides a unified, natural concept for the analysis, and demonstrates how to decompose the output gap into contributions of observed data on output, inflation, unemployment, and other variables. A simple bar-chart of contributing factors, in the case of multi-variable methods, sharpens the intuition behind the estimates and ultimately shows ‘what is in your output gap.’ The paper demonstrates how to interpret effects of data revisions and new data releases for output gap estimates (news effects) and how to obtain more insight into real-time properties of estimators.
Author: Albert J. Eckstein
Publisher:
ISBN:
Category : Economic forecasting
Languages : en
Pages : 44
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Book Description
Author: International Monetary Fund
Publisher: International Monetary Fund
ISBN: 1451952171
Category : Business & Economics
Languages : en
Pages : 65
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Book Description
The methodology used in this paper has three distinguishing features: the natural rate of unemployment and potential output are jointly estimated; estimation integrates wage and price data with “real” and structural data; and third, the methodology encompasses many of the methods found in the literature. The results indicate that potential output growth has recovered somewhat during the early 1980s, but remains below the rapid rates of increase in the late 1960s. The natural rate, after rising during the late 1960s and the 1970s, is found to have declined in the 1980s. The paper concludes with an assessment of medium-term prospects for potential output and-the natural rate.
Author: Ali Alichi
Publisher: International Monetary Fund
ISBN: 1484366328
Category : Business & Economics
Languages : en
Pages : 31
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Book Description
Estimates of potential output and the neutral short-term interest rate play important roles in policy making. However, such estimates are associated with significant uncertainty and subject to significant revisions. This paper extends the structural multivariate filter methodology by adding a monetary policy block, which allows estimating the neutral rate of interest for the U.S. economy. The addition of the monetary policy block further improves the reliability of the structural multivariate filter.
Author: Ali Alichi
Publisher: International Monetary Fund
ISBN: 1475598564
Category : Business & Economics
Languages : en
Pages : 25
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Book Description
Estimates of potential output are an important component of a structured forecasting and policy analysis system. Using information on capacity utilization, this paper extends the multivariate filter developed by Laxton and Tetlow (1992) and modified by Benes and others (2010), Blagrave and others (2015), and Alichi and others (2015). We show that, although still fairly uncertain, the real-time estimates from this approach are more accurate than estimates constructed from naïve univariate statistical filters. The paper presents illustrative estimates for the United States and discusses how the end-of-sample estimates can be improved with additional information.
Author: Ali Alichi
Publisher: International Monetary Fund
ISBN: 1498301320
Category : Business & Economics
Languages : en
Pages : 35
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Book Description
This paper extends the multivariate filter approach of estimating potential output developed by Alichi and others (2018) to incorporate labor market hysteresis. This extension captures the idea that long and deep recessions (expansions) cause persistent damage (improvement) to the labor market, thereby reducing (increasing) potential output. Applying the model to U.S. data results in significantly smaller estimates of output gaps, and higher estimates of the NAIRU, after the global financial crisis, compared to estimates without hysteresis. The smaller output gaps partly explain the absence of persistent deflation despite the slow recovery during 2010-2017. Going forward, if strong growth performance continues well beyond 2018, hysteresis is expected to result in a structural improvement in growth and employment.
Author: Marco Cacciotti
Publisher:
ISBN:
Category :
Languages : en
Pages : 34
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Book Description
This paper presents a new mixed frequency methodology to estimate output gaps and potential output on a quarterly basis. The methodology strongly relies on the production function method commonly agreed at the European level (D'Auria et. al., 2010) but it significantly improves it allowing to assess the impact of real time forecast for GDP and other underlying variables. This feature of the model is particularly welcome in the current Italian budgetary framework which has foreseen the introduction of the principle of a budget balance in structural terms in the Constitution.By allowing to measure output gap with a quarterly span on the basis of recent developments indicators, the methodology provides interesting hints on the cyclical position of the economy in real time to be used for deriving cyclically-adjusted fiscal aggregates.
Author: Valerie Cerra
Publisher: International Monetary Fund
ISBN:
Category : Business & Economics
Languages : en
Pages : 40
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Book Description
This paper reviews a number of different methods that can be used to estimate potential output and the output gap. Measures of potential output and the output gap are useful to help identify the scope for sustainable noninflationary growth and to allow an assessment of the stance of macroeconomic policies. The paper then compares results from some of these methods to the case of Sweden, showing the range of estimates.
Author: Mr.Jiaqian Chen
Publisher: International Monetary Fund
ISBN: 151352786X
Category : Business & Economics
Languages : en
Pages : 28
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Book Description
We apply a range of models to the U.K. data to obtain estimates of the output gap. A structural VAR with an appropriate identification strategy provides improved estimates of output gap with better real time properties and lower sensitivity to temporary shocks than the usual filtering techniques. It also produces smaller out-of-sample forecast errors for inflation. At the same time, however, our results suggest caution in basing policy decisions on output gap estimates.
