Indicator-based estimates of the output gap in the euro area

Sebastian Weiske

VfS Annual Conference 2019 (Leipzig): 30 Years after the Fall of the Berlin Wall - Democracy and Market Economy from Verein für Socialpolitik / German Economic Association

Abstract: The output gap is a key variable of business cycle analysis and policy. Obtaining reliable estimates for it, is very difficult, though. Most real-time estimates are frequently revised over time. The idea of this paper is to use various indicators, for example from business surveys, that (i) were highly correlated with the output gap in the past and (ii) that are ideally not subject to revisions. According to a real-time analysis, indicator-based estimates prove to be more reliable than estimates from international institutions. Currently, estimates point to positive output gaps in the euro area.

Keywords: Business Cycles; Output Gap; Real-time Estimation; Business Survey Data (search for similar items in EconPapers)
JEL-codes: E32 E37 E6 (search for similar items in EconPapers)
Date: 2019
New Economics Papers: this item is included in nep-eec, nep-mac and nep-opm
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:vfsc19:203604

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