USING REAL-TIME OUTPUT GAPS TO EXAMINE PAST AND FUTURE POLICY CHOICES

Christopher Adam () and David Cobham

National Institute Economic Review, 2009, vol. 210, issue 1, 98-110

Abstract: Alternative measures of the UK output gap are considered for 1984-2007. The real-time series is strongly affected by the rolling-time estimation of the trend, and produces a picture of the business cycle which is not consistent with contemporary perceptions of the large fluctuations of the late 1980s and early 1990s. A new, 'nearly-real', measure developed here may be better for estimating historical reaction functions. In the context of the current recession, none of these mechanically derived measures of the output gap are useful. Policymakers should make careful estimates of the likely fall in potential output on the basis of other information.

Keywords: Output gap; real-time; quasi-real; nearly real; Taylor rule (search for similar items in EconPapers)
Date: 2009
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
http://ner.sagepub.com/content/210/1/98.abstract (text/html)

Related works:
Journal Article: Using Real-Time Output Gaps to Examine Past and Future Policy Choices (2009)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:sae:niesru:v:210:y:2009:i:1:p:98-110

Access Statistics for this article

More articles in National Institute Economic Review from National Institute of Economic and Social Research Contact information at EDIRC.
Bibliographic data for series maintained by SAGE Publications ().