Did the Crisis Affect Potential Output?

Conventional Phillips-curve models that are used to estimate the output gap detect a substantial decline in potential output due to the present crisis. Using a multivariate state space model, we show that this result does not hold if the long run role of excess liquidity (that we estimate endogeneously) for inflation is taken into account.

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Year of publication:	2010
Authors:	El-Shagi, Makram
Publisher:	Halle (Saale) : Leibniz-Institut für Wirtschaftsforschung Halle (IWH)
Subject:	Wirtschaftspotenzial \| Phillips-Kurve \| Finanzmarktkrise \| Wirtschaftskrise \| Gesamtwirtschaftliche Liquidität \| Zustandsraummodell \| Schätzung \| USA \| output gap \| liquidity \| state space models \| Produktionslücke \| Liquidität \| Zustandsraummodelle

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Series:	IWH Discussion Papers ; 9/2010
Type of publication:	Book / Working Paper
Type of publication (narrower categories):	Working Paper
Language:	English
Other identifiers:	625509897 [GVK] hdl:10419/37061 [Handle] RePEc:zbw:iwhdps:iwh-9-10 [RePEc]
Classification:	E3 - Prices, Business Fluctuations, and Cycles ; E4 - Money and Interest Rates
Source:	EconStor

Persistent link: https://www.econbiz.de/10010271405