Estimating the output gap in real time

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.

MoreLess

Year of publication:	2013
Authors:	Cheremukhin, Anton
Published in:	Staff Papers. - Federal Reserve Bank of Dallas. - 2013, Dec, 22
Publisher:	Federal Reserve Bank of Dallas
Subject:	Output gap \| economic potential \| estimation

More details

Extent:	application/pdf
Type of publication:	Article
Classification:	c18 ; C80 - Data Collection and Data Estimation Methodology; Computer Programs. General ; E01 - Measurement and Data on National Income and Product Accounts and Wealth
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10011027270