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

A New Methodology for Estimating the Output Gap in the United States
Author :
Publisher : International Monetary Fund
Total Pages : 17
Release :
ISBN-10 : 9781513523460
ISBN-13 : 1513523465
Rating : 4/5 (465 Downloads)

Book Synopsis A New Methodology for Estimating the Output Gap in the United States by : Ali Alichi

Download or read book A New Methodology for Estimating the Output Gap in the United States written by Ali Alichi and published by International Monetary Fund. This book was released on 2015-06-30 with total page 17 pages. Available in PDF, EPUB and Kindle. Book excerpt: 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.


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Estimates of potential output and the neutral short-term interest rate play important roles in policy making. However, such estimates are associated with signif