Comparing Measures of Potential Output
| Autor: | Hannah Shell, Amy Y. Guisinger, Michael T. Owyang |
|---|---|
| Rok vydání: | 2018 |
| Předmět: |
Stabilization policy
Measure (data warehouse) media_common.quotation_subject 05 social sciences Monetary policy Sample (statistics) Interest rate Variable (computer science) Output gap 0502 economics and business Econometrics 050207 economics Potential output 050205 econometrics media_common Mathematics |
| Zdroj: | Review. 100 |
| DOI: | 10.20955/r.100.297-316 |
| Popis: | One of the goals of stabilization policy is to reduce the output gap?the difference between potential and actual output?during downturns. Potential output, however, is an unobserved variable whose definition can vary. For example, some view potential output as the level of output that can be produced when employment is at the natural rate. Others use trend measures of output to measure potential. We survey some of these measures using both full-sample data (all of the data that would be available through June 2017) and real-time data (the actual data that would have been available at different points in the sample). We construct six different measures of potential: a linear trend, a quadratic trend, the Congressional Budget Office measure, and three filtered trends. We compare these measures across methods and across time. We also use the measures to compute the monetary policy prescription in a standard interest rate rule and find very little difference across methods. |
| Databáze: | OpenAIRE |
| Externí odkaz: |
|