A New Methodology for Estimating the Output Gap in the United States

Ali Alichi

No 2015/144, IMF Working Papers from International Monetary Fund

Abstract: The gap between potential and actual output—the output gap—is a key variable for policymaking. This paper adapts the methodology developed in Blagrave and others (2015) to estimate the path of output gap in the U.S. economy. The results show that the output gap has considerably shrunk since the Great Recession, but still remains negative. While the results are more robust than other existing methodologies, there is still significant uncertainty surrounding the estimates.

Keywords: WP; Macroeconomic Modeling; Potential Output; Output Gap; inflation expectation; downside inflation pressure; output gap level; capacity utilization; PCE inflation; HP filter; Capacity utilization; Inflation; Labor force participation; Global (search for similar items in EconPapers)
Pages: 17
Date: 2015-06-30
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Citations: View citations in EconPapers (24)

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