Estimating Potential Output with a Multivariate Filter

Author/Editor: Benes, Jaromir ; Clinton, Kevin ; Garcia-Saltos, Roberto ; Johnson, Marianne ; Laxton, Douglas ; Manchev, Petar ; Matheson, Troy
Publication Date: December 01, 2010
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Summary: This paper develops a simple model for measuring potential output that uses data on inflation, unemployment, and capacity utilization. We apply the model to 10 countries, in addition to the United States and the euro area. While there is a substantial amount of uncertainty around our estimates, we find that the financial crisis has resulted in a reduction in potential output.
Series: Working Paper No. 10/285
Subject(s): Cross country analysis | Economic growth | Economic models | Financial crisis | Fiscal policy | Global Financial Crisis 2008-2009 | Industrial production | Inflation | Monetary policy | Unemployment

Author's Keyword(s): Potential Output | Output Gap | Structural Government Deficits | Cyclical Government Deficits | Fiscal Policy | Monetary Policy | Inflation | Unemployment | Government Debt.
Publication Date: December 01, 2010
Format: Paper
Stock No: WPIEA2010285 Pages: 37
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