Estimating Potential Output with a Multivariate Filter
December 1, 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.
Subject: Capacity utilization, Inflation, Output gap, Potential output, Prices, Production, Production growth
Keywords: A. estimation technique, A. output gap, Capacity utilization, core inflation, Cyclical Government Deficits, D. output gap equation, equilibrium unemployment, Fiscal Policy, Government Debt, Inflation, Monetary Policy, MV filter estimate, Output Gap, output gap change, Potential Output, Production growth, Structural Government Deficits, Unemployment, WP
Pages:
37
Volume:
2010
DOI:
Issue:
285
Series:
Working Paper No. 2010/285
Stock No:
WPIEA2010285
ISBN:
9781455210923
ISSN:
1018-5941
