UK inflation in the 1970s and 1980s: the role of output gap mismeasurement

Edward Nelson and Kalin Nikolov

Bank of England working papers from Bank of England

Abstract: Understanding the degree of measurement error in the estimates of the output gap available to policy-makers in 'real time' is important both for the formulation of monetary policy and for the study of inflation behaviour. For the United Kingdom, no official output gap series exists, but an approximate series can be deduced from analysis of statistical releases and policy-makers' statements. On this basis, a real-time UK output gap series is constructed, beginning in 1965, and it is therefore possible to obtain estimates of the extent of real-time output gap mismeasurement in the 1970s and 1980s. Monetary policy errors due to output gap mismeasurement are found to have contributed approximately 3.0 to 7.1 percentage points to average UK inflation in the 1970s and 0.7 to 5.5 percentage points to inflation in the 1980s.

Date: 2001-12
New Economics Papers: this item is included in nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (22)

Downloads: (external link)
http://www.bankofengland.co.uk/archive/Documents/h ... apers/2001/wp148.pdf (application/pdf)
Our link check indicates that this URL is bad, the error code is: 404 Not Found (http://www.bankofengland.co.uk/archive/Documents/historicpubs/workingpapers/2001/wp148.pdf [301 Moved Permanently]--> https://www.bankofengland.co.uk/archive/Documents/historicpubs/workingpapers/2001/wp148.pdf)

Related works:
Journal Article: UK inflation in the 1970s and 1980s: the role of output gap mismeasurement (2003)
Working Paper: UK Inflation in the 1970s and 1980s: The Role of Output Gap Mismeasurement (2001)
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:boe:boeewp:148

Access Statistics for this paper

More papers in Bank of England working papers from Bank of England Bank of England, Threadneedle Street, London, EC2R 8AH. Contact information at EDIRC.
Bibliographic data for series maintained by Digital Media Team ().