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Author: Misa Tanaka
Publisher:
ISBN:
Category :
Languages : en
Pages : 0
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Book Description
The United Kingdom is a relatively small, open economy. The Monetary Policy Committee monitors global influences on UK costs and prices as part of its assessment of the outlook for CPI inflation. One suggested measure of these global influences is the global output gap, defined as the deviation of world demand from world potential supply. This article considers the relevance of such a measure in assessing global influences on UK costs and prices. It argues that there are a number of conceptual problems and measurement issues relating to the global output gap.
Author: Misa Tanaka
Publisher:
ISBN:
Category :
Languages : en
Pages : 0
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Book Description
The United Kingdom is a relatively small, open economy. The Monetary Policy Committee monitors global influences on UK costs and prices as part of its assessment of the outlook for CPI inflation. One suggested measure of these global influences is the global output gap, defined as the deviation of world demand from world potential supply. This article considers the relevance of such a measure in assessing global influences on UK costs and prices. It argues that there are a number of conceptual problems and measurement issues relating to the global output gap.
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.
Author: Francesco Furlanetto
Publisher: International Monetary Fund
ISBN: 1498305326
Category : Business & Economics
Languages : en
Pages : 44
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Book Description
The recent global financial crisis illustrates that financial frictions are a significant source of volatility in the economy. This paper investigates monetary policy stabilization in an environment where financial frictions are a relevant source of macroeconomic fluctuation. We derive a measure of output gap that accounts for frictions in financial market. Furthermore we illustrate that, in the presence of financial frictions, a benevolent central bank faces a substantial trade-off between nominal and real stabilization; optimal monetary policy significantly reduces fluctuations in price and wage inflations but fails to alleviate the output gap volatility. This suggests a role for macroprudential policies.
Author: Odile Chagny
Publisher:
ISBN:
Category :
Languages : en
Pages : 48
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Book Description
Author: Mr.Niels-Jakob H Hansen
Publisher: International Monetary Fund
ISBN: 1513508342
Category : Business & Economics
Languages : en
Pages : 23
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Book Description
Output gap estimates are widely used to inform macroeconomic policy decisions, including in Korea. The main determinant of these estimates is the measure of labor market slack. The traditional measure of unemployment in Korea yields an incomplete estimate of labor market slack, given that many workers prefer involuntary part-time jobs or leaving the labor force rather than registering as unemployed. This paper discusses a way in which the measure of unemployment can be broadened to yield a more accurate measure of labor market slack. This broader measure is then used to estimate the output gap using a multivariate filter, yielding a more meaningful measure of the output gap.
Author: Mr.Alvar Kangur
Publisher: International Monetary Fund
ISBN: 1513512544
Category : Business & Economics
Languages : en
Pages : 42
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Book Description
We study the properties of the IMF-WEO estimates of real-time output gaps for countries in the euro area as well as the determinants of their revisions over 1994-2017. The analysis shows that staff typically saw economies as operating below their potential. In real time, output gaps tend to have large and negative averages that are largely revised away in later vintages. Most of the mis-measurement in real time can be explained by the difficulty in predicting recessions and by overestimation of the economy’s potential capacity. We also find, in line with earlier literature, that real-time output gaps are not useful for predicting inflation. In addition, countries where slack (and potential growth) is overestimated to a larger extent primary fiscal balances tend to be lower and public debt ratios are higher and increase faster than projected. Previous research suggests that national authorities’ real-time output gaps suffer from a similar bias. To the extent these estimates play a role in calibrating fiscal policy, over-optimism about long-term growth could contribute to excessive deficits and debt buildup.
Author: Michał Hulej
Publisher:
ISBN:
Category :
Languages : en
Pages :
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Book Description
Author: Laurent Ferrara
Publisher: Springer
ISBN: 3319790757
Category : Business & Economics
Languages : en
Pages : 300
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Book Description
This book collects selected articles addressing several currently debated issues in the field of international macroeconomics. They focus on the role of the central banks in the debate on how to come to terms with the long-term decline in productivity growth, insufficient aggregate demand, high economic uncertainty and growing inequalities following the global financial crisis. Central banks are of considerable importance in this debate since understanding the sluggishness of the recovery process as well as its implications for the natural interest rate are key to assessing output gaps and the monetary policy stance. The authors argue that a more dynamic domestic and external aggregate demand helps to raise the inflation rate, easing the constraint deriving from the zero lower bound and allowing monetary policy to depart from its current ultra-accommodative position. Beyond macroeconomic factors, the book also discusses a supportive financial environment as a precondition for the rebound of global economic activity, stressing that understanding capital flows is a prerequisite for economic-policy decisions.
Author: Enrique Martinez-Garcia
Publisher: DIANE Publishing
ISBN: 143798066X
Category : Business & Economics
Languages : en
Pages : 37
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Book Description
Illustrates the analytical content of the global slack hypothesis in the context of variant of the New Open-Economy Macro model under the assumptions of both producer currency pricing and local currency. The model predicts that the Phillips curve for domestic CPI inflation will be flatter under most plausible parameterizations, the more important international trade is to the domestic economy. The model also predicts that foreign output gaps will matter for inflation dynamics, along with the domestic output gap. When the Phillips curve includes the terms of trade gap rather than the foreign output gap, the response of domestic inflation to the domestic output gap is the same as in the closed-economy case ¿ceteris paribus.¿ This is a print on demand report.
Author: J. Ferreiro
Publisher: Springer
ISBN: 0230228267
Category : Business & Economics
Languages : en
Pages : 235
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Book Description
This book provides a comprehensive analysis of national fiscal policies in the European Union and in the European Monetary Union. Adopting a critical perspective, the book offers a deep insight into the consequences of the current strategy of national fiscal policies on economic activity.
