The (un)reliability of real-time output gap estimates with revised data

Onur Ince () and David Papell

Economic Modelling, 2013, vol. 33, issue C, 713-721

Abstract: This paper investigates the differences between real-time and ex-post output gap estimates using a newly-constructed international real-time dataset over the period from 1973:Q1 to 2012:Q3. We extend the findings in Orphanides and van Norden (2002) for the United States that the use of ex-post information in calculating potential output, not the data revisions themselves, is the major cause of the difference between real-time and ex-post output gap estimates to nine additional OECD countries. The results are robust to the use of linear, quadratic, Hodrick–Prescott, Baxter–King, and Christiano–Fitzgerald detrending methods. By using quasi real-time methods, reliable real-time output gap estimates can be constructed with revised data.

Keywords: Output gap; Real-time data; Data revision; Business cycles (search for similar items in EconPapers)
JEL-codes: E32 E52 E58 (search for similar items in EconPapers)
Date: 2013
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (16)

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Working Paper: The (Un)Reliability of Real-Time Output Gap Estimates with Revised Data (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecmode:v:33:y:2013:i:c:p:713-721

DOI: 10.1016/j.econmod.2013.05.023

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