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Produkční mezera jako indikátor inflace - případ pro českou ekonomiku
[Output Gap as Indicator of Inflation - Case for Czech Economy]

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  • Dana Kloudová

Abstract

It is generally accepted, that output gap belongs to the main indicators of inflationary pressures and is often used by central banks when executing monetary policy. When output gap is positive, there are inflationary pressures in economy and inflation will rise. In case, that there is negative output gap in economy, inflation will decline. The aim of this paper is to find whether there is relationship between these two variables for Czech economy. To find the answer, two gap models following Coe, McDermott (1997) and Claus (2000a) will be used - with level of the output gap and change in the output gap. All tests confirm, that central bank should use it as indicator of inflation.

Suggested Citation

  • Dana Kloudová, 2013. "Produkční mezera jako indikátor inflace - případ pro českou ekonomiku [Output Gap as Indicator of Inflation - Case for Czech Economy]," Politická ekonomie, Prague University of Economics and Business, vol. 2013(5), pages 639-652.
    • Handle: RePEc:prg:jnlpol:v:2013:y:2013:i:5:id:921:p:639-652
    DOI: 10.18267/j.polek.921
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    References listed on IDEAS

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    1. Athanasios Orphanides & Simon van Norden, 2002. "The Unreliability of Output-Gap Estimates in Real Time," The Review of Economics and Statistics, MIT Press, vol. 84(4), pages 569-583, November.
    2. Dupasquier, Chantal & Guay, Alain & St-Amant, Pierre, 1999. "A Survey of Alternative Methodologies for Estimating Potential Output and the Output Gap," Journal of Macroeconomics, Elsevier, vol. 21(3), pages 577-595, July.
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    5. Brunner, Karl & Meltzer, Allan H., 1976. "The Phillips curve," Carnegie-Rochester Conference Series on Public Policy, Elsevier, vol. 1(1), pages 1-18, January.
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    7. Iris Claus, 2000. "Is the output gap a useful indicator of inflation?," Reserve Bank of New Zealand Discussion Paper Series DP2000/05, Reserve Bank of New Zealand.
    8. White, Halbert, 1980. "A Heteroskedasticity-Consistent Covariance Matrix Estimator and a Direct Test for Heteroskedasticity," Econometrica, Econometric Society, vol. 48(4), pages 817-838, May.
    9. Cayen, Jean-Philippe & van Norden, Simon, 2005. "The reliability of Canadian output-gap estimates," The North American Journal of Economics and Finance, Elsevier, vol. 16(3), pages 373-393, December.
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    More about this item

    Keywords

    inflation; output gap; uncertainty; gap model;
    All these keywords.

    JEL classification:

    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • E37 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Forecasting and Simulation: Models and Applications

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