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Estimating potential output for New Zealand

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  • Iris Claus

Abstract

One of the main indicators of inflationary pressures used by the Reserve Bank of New Zealand is the output gap. An alternative to the Reserve Bank's incumbent measure of potential output is obtained using a structural vector autoregression (SVAR) methodology with long-run restrictions. The Reserve Bank's official measure of the output gap and the estimate obtained from the SVAR model tend to agree about the state of the cycle, especially during the 1970s and 1990s. However, during the 1980s, the period of economic reforms, they are more dissimilar.

Suggested Citation

  • Iris Claus, 2003. "Estimating potential output for New Zealand," Applied Economics, Taylor & Francis Journals, vol. 35(7), pages 751-760.
    • Handle: RePEc:taf:applec:v:35:y:2003:i:7:p:751-760
    DOI: 10.1080/00036840210155168
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    References listed on IDEAS

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    Cited by:

    1. Bagsic, Cristeta & Paul, McNelis, 2007. "Output Gap Estimation for Inflation Forecasting: The Case of the Philippines," MPRA Paper 86789, University Library of Munich, Germany.
    2. Jérôme Creel & Maurizio Iacopetta, 2015. "Macroeconomic Policy and potential growth," Documents de Travail de l'OFCE 2015-15, Observatoire Francais des Conjonctures Economiques (OFCE).
    3. Robert A Buckle & Kunhong Kim & Heather Kirkham & Nathan McLellan & Jared Sharma, 2002. "A structural VAR model of the New Zealand business cycle," Treasury Working Paper Series 02/26, New Zealand Treasury.
    4. Michał Brzoza-Brzezina, 2002. "Estimating the Natural Rate of Interest: A SVAR Approach," NBP Working Papers 27, Narodowy Bank Polski.
    5. A D Adom, 2016. "Resilience of developing countries to shocks: Case study of WAEMU countries with SUR and VAR Approaches," Economic Issues Journal Articles, Economic Issues, vol. 21(2), pages 105-138, September.
    6. Acevedo Rueda, Rafael Alexis & Mora Mora, José U. & Harmath Fernández, Pedro Alexander, 2012. "La brecha del producto y el producto potencial en Venezuela: una estimación SVAR [Output Gap and Potential GDP in Venezuela: A SVAR Estimation]," MPRA Paper 58691, University Library of Munich, Germany, revised 2013.
    7. Kappler, Marcus, 2007. "Projecting the Medium-Term: Outcomes and Errors for GDP Growth," ZEW Discussion Papers 07-068, ZEW - Leibniz Centre for European Economic Research.
    8. repec:hal:spmain:info:hdl:2441/3d1rt55ran82d86guhaponket6 is not listed on IDEAS
    9. Belegri-Roboli, Athena & Michaelides, Panayotis G., 2005. "The Basic Characteristics of the Regional Department of Attica and Estimates of Potential Output and Potential Labour," MPRA Paper 74452, University Library of Munich, Germany.
    10. Tatiana Cesaroni, 2010. "Estimating potential output using business survey data in a svar framework," Economics Bulletin, AccessEcon, vol. 30(3), pages 2249-2258.
    11. Buckle, Robert A. & Kim, Kunhong & Kirkham, Heather & McLellan, Nathan & Sharma, Jarad, 2007. "A structural VAR business cycle model for a volatile small open economy," Economic Modelling, Elsevier, vol. 24(6), pages 990-1017, November.
    12. Victor Gaiduch & Benjamin Hunt, 2000. "Inflation targeting under potential output uncertainty," Reserve Bank of New Zealand Discussion Paper Series DP2000/08, Reserve Bank of New Zealand.
    13. 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.
    14. Mr. Victor Gaiduch & Mr. Benjamin L Hunt, 2000. "Inflation Targeting Under Potential Output Uncertainty," IMF Working Papers 2000/158, International Monetary Fund.
    15. Michal Andrle, 2013. "What Is in Your Output Gap? Unified Framework & Decomposition into Observables," IMF Working Papers 2013/105, International Monetary Fund.
    16. Belegri-Roboli, Athena & Demertzi, Aggeliki & Markaki, Maria & Michaelides, Panayotis G., 2011. "Labour Gap, Output Gap and Inflation by Economic Sector: The case of Greece and the Peloponnese Region (2000-2007)," MPRA Paper 74446, University Library of Munich, Germany.

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