Measuring Output Gap : Is It Worth Your Time? /

We apply a range of models to the U.K. data to obtain estimates of the output gap. A structural VAR with an appropriate identification strategy provides improved estimates of output gap with better real time properties and lower sensitivity to temporary shocks than the usual filtering techniques. It...

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Bibliographic Details
Main Author: Chen, Jiaqian
Other Authors: Gornicka, Lucyna
Format: Journal
Language:English
Published: Washington, D.C. : International Monetary Fund, 2020.
Series:IMF Working Papers; Working Paper ; No. 2020/024
Online Access:Full text available on IMF
Description
Summary:We apply a range of models to the U.K. data to obtain estimates of the output gap. A structural VAR with an appropriate identification strategy provides improved estimates of output gap with better real time properties and lower sensitivity to temporary shocks than the usual filtering techniques. It also produces smaller out-of-sample forecast errors for inflation. At the same time, however, our results suggest caution in basing policy decisions on output gap estimates.
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Physical Description:1 online resource (28 pages)
Format:Mode of access: Internet
ISSN:1018-5941
Access:Electronic access restricted to authorized BRAC University faculty, staff and students