Estimating Potential Output with a Multivariate Filter

International Monetary Fund

No 2010/285, IMF Working Papers from International Monetary Fund

Abstract: This paper develops a simple model for measuring potential output that uses data on inflation, unemployment, and capacity utilization. We apply the model to 10 countries, in addition to the United States and the euro area. While there is a substantial amount of uncertainty around our estimates, we find that the financial crisis has resulted in a reduction in potential output.

Keywords: WP; core inflation; Potential Output; Output Gap; Structural Government Deficits; Cyclical Government Deficits; Fiscal Policy; Monetary Policy; Inflation; Unemployment; Government Debt; D. output gap equation; equilibrium unemployment; output gap change; MV filter estimate; A. output gap; A. estimation technique; Capacity utilization; Production growth (search for similar items in EconPapers)
Pages: 37
Date: 2010-12-01
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Citations: View citations in EconPapers (55)

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