Implicit Estimates of Natural, Trend, and Cyclical Components of Real GNP

Charles Nelson

No 2253, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Estimates of the natural or full employment level of real GNP have usually been obtained by statistical detrending procedures which assume independence between trend and cycle. This paper presents an alternative approach which says that the natural level should be measured in the context of a macro model. If the quantity equation holds with money exogenous and if the price level is sticky, then observed real GNB will reflect both nominal shocks, which are observed, and real shocks, which are unobserved shifts in the natural level. The path of the natural level is then implicit in the data given the model. Calculated paths of the natural level of U.S. real GNP and the resulting business cycle are presented.

Date: 1987-05
Note: ME
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://www.nber.org/papers/w2253.pdf (application/pdf)

Related works:
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:nbr:nberwo:2253

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w2253

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().