Real-Time Properties of the Federal Reserve's Output Gap

Rochelle M. Edge and Jeremy B. Rudd
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Rochelle M. Edge: Board of Governors of the Federal Reserve System
Jeremy B. Rudd: Board of Governors of the Federal Reserve System

The Review of Economics and Statistics, 2016, vol. 98, issue 4, 785-791

Abstract: We consider the revision properties of Federal Reserve Board staff estimates of the output gap after the mid-1990s and examine the usefulness of these estimates for inflation forecasting. Over this period, we find that the Federal Reserve's output gap is more reliably estimated in real time than previous studies have documented for earlier periods and alternative estimation techniques. In contrast to previous work, we also find no deterioration in forecast performance when inflation projections are conditioned on real-time rather than on final estimates of the output gap.

JEL-codes: C53 E31 E37 (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (19)

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