Basu, Susanto; Fernald, John G. - In: Review (2009) Jul, pp. 187-214
Potential output is an important concept in economics. Policymakers often use a one-sector neoclassical model to think about long-run growth, and they often assume that potential output is a smooth series in the short run -- approximated by a medium- or long-run estimate. But in both the short...