Estimates of Potential Output and the Neutral Rate for the U.S. Economy

Alichi, Ali; Al-Mashat, Rania; Avetisyan, Hayk; Benes, Jaromir; Bizimana, Olivier; Butavyan, Aram; Ford, Robert; Ghazaryan, Narek; Grigoryan, Vahagn; Harutyunyan, Mane; Hovhannisyan, Anahit; Hovhannisyan, Edgar; Karapetyan, Hayk; Kharaishvili, Mariam; Laxton, Douglas; Liqokeli, Akaki; Matikyan, Karolina; Minasyan, Gevorg; Mkhatrishvili, Shalva; Nurbekyan, Armen; Orlov, Andrei; Pashinyan, Babken; Petrosyan, Garik; Rezepina, Yekaterina; Shirkhanyan, Aleksandr; Sopromadze, Tamta; Torosyan, Lusine; Vardanyan, Erik; Wang, Hou; Yao, Jiaxiong

Estimates of Potential Output and the Neutral Rate for the U.S. Economy

Ali Alichi, Rania Al-Mashat, Hayk Avetisyan, Jaromir Benes, Olivier Bizimana, Aram Butavyan, Robert Ford, Narek Ghazaryan, Vahagn Grigoryan, Mane Harutyunyan, Anahit Hovhannisyan, Edgar Hovhannisyan, Hayk Karapetyan, Mariam Kharaishvili, Douglas Laxton, Akaki Liqokeli, Karolina Matikyan, Gevorg Minasyan, Shalva Mkhatrishvili, Armen Nurbekyan, Andrei Orlov, Babken Pashinyan, Garik Petrosyan, Yekaterina Rezepina, Aleksandr Shirkhanyan, Tamta Sopromadze, Lusine Torosyan, Erik Vardanyan, Hou Wang and Jiaxiong Yao

No 2018/152, IMF Working Papers from International Monetary Fund

Abstract: Estimates of potential output and the neutral short-term interest rate play important roles in policy making. However, such estimates are associated with significant uncertainty and subject to significant revisions. This paper extends the structural multivariate filter methodology by adding a monetary policy block, which allows estimating the neutral rate of interest for the U.S. economy. The addition of the monetary policy block further improves the reliability of the structural multivariate filter.

Keywords: WP; monetary policy; Macroeconomic Modeling; Potential Output; Neutral Rate; reaction function; output gap equation; monetary policy block; MPMOD output gap; inflation expectation; Output gap; Inflation; Capacity utilization; Inflation targeting; Global (search for similar items in EconPapers)
Pages: 31
Date: 2018-07-06
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Citations: View citations in EconPapers (3)

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