A New Methodology for Estimating the Output Gap in the United States
June 30, 2015
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Summary
The gap between potential and actual output—the output gap—is a key variable for policymaking. This paper adapts the methodology developed in Blagrave and others (2015) to estimate the path of output gap in the U.S. economy. The results show that the output gap has considerably shrunk since the Great Recession, but still remains negative. While the results are more robust than other existing methodologies, there is still significant uncertainty surrounding the estimates.
Subject: Capacity utilization, Inflation, Labor, Labor force participation, Output gap, Potential output, Prices, Production
Keywords: capacity utilization, Capacity utilization, downside inflation pressure, Global, HP filter, Inflation, inflation expectation, Labor force participation, Macroeconomic Modeling, Output Gap, output gap level, PCE inflation, Potential Output, WP
Pages:
17
Volume:
2015
DOI:
Issue:
144
Series:
Working Paper No. 2015/144
Stock No:
WPIEA2015144
ISBN:
9781513507569
ISSN:
1018-5941
