Measuring the Output Gap using Large Datasets
Keyword(s):
Long Run
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Abstract We propose a new measure of the output gap based on a dynamic factor model that is estimated on a large number of U.S. macroeconomic indicators and which incorporates relevant stylized facts about macroeconomic data (co-movements, non-stationarity, and the slow drift in long-run output growth over time). We find that, (1) from the mid-1990s to 2008, the U.S. economy operated above its potential; and, (2) in 2018:Q4, the labor market was tighter than the market for goods and services. Because it is mainly data-driven, our measure is a natural complementary tool to the theoretical models used at policy institutions.
2004 ◽
Vol 11
(10)
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pp. 595-600
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2011 ◽
Vol 3
(1)
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pp. 69-81
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2018 ◽
Vol 118
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pp. 281-317
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2018 ◽
Vol 22
(5)
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pp. 1113-1133
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2018 ◽
Vol 33
(5)
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pp. 625-642
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2016 ◽
Vol 15
(1)
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pp. 119-145
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