Measuring Output Gap Is It Worth Your Time
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Author | : Mr.Jiaqian Chen |
Publisher | : International Monetary Fund |
Total Pages | : 28 |
Release | : 2020-02-07 |
Genre | : Business & Economics |
ISBN | : 151352786X |
Download Measuring Output Gap: Is It Worth Your Time? Book in PDF, Epub and Kindle
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 | : Anthony Garratt |
Publisher | : |
Total Pages | : 19 |
Release | : 2010 |
Genre | : Industrial productivity |
ISBN | : |
Download Measuring output gap uncertainty Book in PDF, Epub and Kindle
Author | : Michal Andrle |
Publisher | : International Monetary Fund |
Total Pages | : 45 |
Release | : 2013-05-10 |
Genre | : Business & Economics |
ISBN | : 1484399552 |
Download What Is in Your Output Gap? Unified Framework & Decomposition into Observables Book in PDF, Epub and Kindle
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 | : Anton Cheremukhin |
Publisher | : |
Total Pages | : 26 |
Release | : 2013 |
Genre | : Banks and banking |
ISBN | : |
Download Estimating the Output Gap in Real Time Book in PDF, Epub and Kindle
I propose a novel method of estimating the potential level of U.S. GDP in real time. The proposed wage-based measure of economic potential remains virtually unchanged when new data are released. The distance between current and potential output--the output gap--satisfies Okun's law and outperforms many other measures of slack in forecasting inflation. Thus, I provide a robust statistical tool useful for understanding current economic conditions and guiding policymaking.
Author | : |
Publisher | : |
Total Pages | : 18 |
Release | : 2014 |
Genre | : |
ISBN | : |
Download Real-time Measures of the Output Gap and Fiscal Policy Stance Book in PDF, Epub and Kindle
Author | : Ali Alichi |
Publisher | : International Monetary Fund |
Total Pages | : 17 |
Release | : 2015-06-30 |
Genre | : Business & Economics |
ISBN | : 1513523465 |
Download A New Methodology for Estimating the Output Gap in the United States Book in PDF, Epub and Kindle
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 | : Mr.Alvar Kangur |
Publisher | : International Monetary Fund |
Total Pages | : 42 |
Release | : 2019-09-20 |
Genre | : Business & Economics |
ISBN | : 1513512544 |
Download How Informative Are Real Time Output Gap Estimates in Europe? Book in PDF, Epub and Kindle
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 | : Ms.Valerie Cerra |
Publisher | : International Monetary Fund |
Total Pages | : 50 |
Release | : 2020-05-29 |
Genre | : Business & Economics |
ISBN | : 1513536990 |
Download Hysteresis and Business Cycles Book in PDF, Epub and Kindle
Traditionally, economic growth and business cycles have been treated independently. However, the dependence of GDP levels on its history of shocks, what economists refer to as “hysteresis,” argues for unifying the analysis of growth and cycles. In this paper, we review the recent empirical and theoretical literature that motivate this paradigm shift. The renewed interest in hysteresis has been sparked by the persistence of the Global Financial Crisis and fears of a slow recovery from the Covid-19 crisis. The findings of the recent literature have far-reaching conceptual and policy implications. In recessions, monetary and fiscal policies need to be more active to avoid the permanent scars of a downturn. And in good times, running a high-pressure economy could have permanent positive effects.
Author | : Davide Debortoli |
Publisher | : International Monetary Fund |
Total Pages | : 56 |
Release | : 2017-07-21 |
Genre | : Business & Economics |
ISBN | : 1484311752 |
Download Designing a Simple Loss Function for Central Banks Book in PDF, Epub and Kindle
Yes, it makes a lot of sense. This paper studies how to design simple loss functions for central banks, as parsimonious approximations to social welfare. We show, both analytically and quantitatively, that simple loss functions should feature a high weight on measures of economic activity, sometimes even larger than the weight on inflation. Two main factors drive our result. First, stabilizing economic activity also stabilizes other welfare relevant variables. Second, the estimated model features mitigated inflation distortions due to a low elasticity of substitution between monopolistic goods and a low interest rate sensitivity of demand. The result holds up in the presence of measurement errors, with large shocks that generate a trade-off between stabilizing inflation and resource utilization, and also when ensuring a low probability of hitting the zero lower bound on interest rates.
Author | : Michał Hulej |
Publisher | : |
Total Pages | : |
Release | : 2015 |
Genre | : |
ISBN | : |
Download Output Gap Measure Based on Survey Data Book in PDF, Epub and Kindle