Minding the gap: central bank estimates of the unemployment natural rate

Sharon Kozicki and Peter Tinsley

No RWP 05-03, Research Working Paper from Federal Reserve Bank of Kansas City

Abstract: A time-varying parameter framework is suggested for use with real-time multiperiod forecast data to estimate implied forecast equations. The framework is applied to historical briefing forecasts prepared for the Federal Open Market Committee to estimate the U.S. central bank?s ex ante perceptions of the natural rate of unemployment. Relative to retrospective estimates, empirical results do not indicate severe underestimation of the natural rate of unemployment in the 1970s.

Keywords: Unemployment (search for similar items in EconPapers)
Date: 2005
New Economics Papers: this item is included in nep-for, nep-mac and nep-mon
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Journal Article: Minding the Gap: Central Bank Estimates of the Unemployment Natural Rate (2006)
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