 What Is in Your Output Gap? Unified Framework & Decomposition into ObservablesNo 2013/105, IMF Working Papers from International Monetary Fund Abstract: This paper discusses several popular methods to estimate the ‘output gap’. It provides a unified, natural concept for the analysis, and demonstrates how to decompose the output gap into contributions of observed data on output, inflation, unemployment, and other variables. A simple bar-chart of contributing factors, in the case of multi-variable methods, sharpens the intuition behind the estimates and ultimately shows ‘what is in your output gap.’ The paper demonstrates how to interpret effects of data revisions and new data releases for output gap estimates (news effects) and how to obtain more insight into real-time properties of estimators. Keywords: WP; least squares; output gap; linear filters; observable decomposition; DSGE; output gap estimate; B. output gap estimation; output gap estimation method; backward-looking output gap equation; output gap estimator; inflation expectation; output gap estimation approach; Potential output; Inflation; Capacity utilization; Estimation techniques (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:imf:imfwpa:2013/105 Ordering information: This working paper can be ordered from Access Statistics for this paper More papers in IMF Working Papers from International Monetary Fund International Monetary Fund, Washington, DC USA. Contact information at EDIRC. |
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