Estimates of Potential Output and the Neutral Rate for the U.S. Economy


Ali Alichi ; Rania A. Al-Mashat ; Hayk Avetisyan ; Jaromir Benes ; Olivier Bizimana ; Aram Butavyan ; Robert Ford ; Narek Ghazaryan ; Vahagn Grigoryan ; Mane Harutyunyan ; Anahit Hovhannisyan ; Edgar Hovhannisyan ; Hayk Karapetyan ; Mariam Kharaishvili ; Douglas Laxton ; Akaki Liqokeli ; Karolina Matikyan ; Gevorg Minasyan ; Shalva Mkhatrishvili ; Armen Nurbekyan ; Andrei Orlov ; Babken Pashinyan ; Garik Petrosyan ; Yekaterina Rezepina ; Aleksandr Shirkhanyan ; Tamta Sopromadze ; Lusine Torosyan ; Erik Vardanyan ; Hou Wang ; Jiaxiong Yao

Publication Date:

July 6, 2018

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Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.


Estimates of potential output and the neutral short-term interest rate play important roles in policy making. However, such estimates are associated with significant uncertainty and subject to significant revisions. This paper extends the structural multivariate filter methodology by adding a monetary policy block, which allows estimating the neutral rate of interest for the U.S. economy. The addition of the monetary policy block further improves the reliability of the structural multivariate filter.


Working Paper No. 2018/152



Publication Date:

July 6, 2018



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