Estimating Gaps and Trends for the Chilean Economy
AbstractTrend GDP and the output gap are key inputs for policy evaluation and forecasting in standard models of monetary policy. However, the measurement of these variables is plagued with difficulties. In this paper we propose two different approaches. First, a data-based approach, that starts with the primal and dual estimates of total factor productivity (TFP) growth, and then uses a variety of procedures to filter the inputs. Second, a model-consistent framework that simultaneously estimates the macroeconomic dynamics and the underlying trends of the economy. We compare the difficulties in using each methodology, and we use them to construct measures of the output gap and potential growth for Chile
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Bibliographic InfoPaper provided by Central Bank of Chile in its series Working Papers Central Bank of Chile with number 165.
Date of creation: Jun 2002
Date of revision:
Other versions of this item:
- Gabriel Contreras & Pablo García, 2002. "Estimating Gaps and Trends for the Chilean Economy," Central Banking, Analysis, and Economic Policies Book Series, in: Norman Loayza & Raimundo Soto & Norman Loayza (Series Editor) & Klaus Schmidt-Hebbel (Series Editor) (ed.), Economic Growth: Sources, Trends, and Cycles, edition 1, volume 6, chapter 15, pages 523-554 Central Bank of Chile.
- Gabriela Contreras M. & Pablo García S., 2002. "Estimating Gaps and Trends for the Chilean Economy," Journal Economía Chilena (The Chilean Economy), Central Bank of Chile, vol. 5(2), pages 37-55, August.
- NEP-ALL-2002-07-02 (All new papers)
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