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A menu on output gap estimation methods

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  • Luis J. Álvarez

    (Banco de España)

  • Ana Gómez-Loscos

    (Banco de España)

Abstract

This paper presents a survey of output gap modeling techniques, which are of special interest for policy making institutions. We distinguish between univariate -which estimate trend output on the basis of actual output, without taking into account the information contained in other variables–, and multivariate methods –which incorporate useful information on some other variables, based on economic theory. We present the main advantages and drawbacks of the different methods.

Suggested Citation

  • Luis J. Álvarez & Ana Gómez-Loscos, 2017. "A menu on output gap estimation methods," Working Papers 1720, Banco de España.
    • Handle: RePEc:bde:wpaper:1720
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    Cited by:

    1. Chalmovianský, Jakub & Němec, Daniel, 2022. "Assessing uncertainty of output gap estimates: Evidence from Visegrad countries," Economic Modelling, Elsevier, vol. 116(C).
    2. Luis J. Álvarez & Maria Dolores Gadea & Ana Gómez‐Loscos, 2021. "Inflation comovements in advanced economies: Facts and drivers," The World Economy, Wiley Blackwell, vol. 44(2), pages 485-509, February.
    3. Granados, Camilo & Parra-Amado, Daniel, 2024. "Estimating the output gap after COVID: How to address unprecedented macroeconomic variations," Economic Modelling, Elsevier, vol. 135(C).
    4. Oliveira, Eleonora de & Palma, Andreza A. & Portugal, Marcelo S., 2024. "A Markov-Switching DSGE model for measuring the output gap in Brazil," Latin American Journal of Central Banking (previously Monetaria), Elsevier, vol. 5(1).
    5. Luis J. Álvarez & Ana Gómez-Loscos & María Dolores Gadea, 2019. "Inflation interdependence in advanced economies," Working Papers 1920, Banco de España.
    6. Anderl, Christina & Caporale, Guglielmo Maria, 2023. "Nonlinearities in the exchange rate pass-through: The role of inflation expectations," International Economics, Elsevier, vol. 173(C), pages 86-101.
    7. Ana Arencibia Pareja & Ana Gomez-Loscos & Mercedes de Luis López & Gabriel Perez-Quiros, 2020. "A Short Term Forecasting Model for the Spanish GDP and itsDemand Components," Revista Economía, Fondo Editorial - Pontificia Universidad Católica del Perú, vol. 43(85), pages 1-30.
    8. Mohamed A. M. Sallam & Mohamed R. Neffati, 2019. "Estimation and Analysis of the Output Gap for the Saudi Economy; Econometric Study (1970-2016)," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 9(2), pages 267-284, February.

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    More about this item

    Keywords

    output gap; potential output; business cycle; trend output; survey;
    All these keywords.

    JEL classification:

    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity

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