01757cas a2200241 a 4500 AALejournalIMF003045 230101c9999 xx r poo 0 0eng d 5.00 USD 9781451856675 1018-5941 BD-DhAAL BD-DhAAL Billmeier, Andreas. Ghostbusting : Which Output Gap Measure Really Matters? / Andreas Billmeier. Washington, D.C. : International Monetary Fund, 2004. 1 online resource (35 pages) IMF Working Papers <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required Electronic access restricted to authorized BRAC University faculty, staff and students This paper investigates various output gap measures in a simple inflation forecasting framework. Reflecting the cyclical position of an economy, an (unobservable) output gap has important implications for economic analysis. I construct and compare common output gap measures for five European countries. Since output above potential reflects domestic inflationary pressures, including a gap could improve the accuracy of autoregressive inflation forecasting. This assertion is tested in a simple simulated out-of-sample forecasting exercise for the period 1990-2002. The main conclusions are that an output gap rarely provides useful information and that there is no single best output gap measure across countries. Mode of access: Internet IMF Working Papers; Working Paper ; No. 2004/146 Full text available on IMF http://elibrary.imf.org/view/journals/001/2004/146/001.2004.issue-146-en.xml IMF e-Library