IDEAS home Printed from https://ideas.repec.org/a/bla/ecorec/v81y2005i252p6-18.html
   My bibliography  Save this article

Output Gaps In Real Time: How Reliable Are They?

Author

Listed:
  • DAVID GRUEN
  • TIM ROBINSON
  • ANDREW STONE

Abstract

The output gap is of central interest to policymakers. Being unobservable, however, its estimation is prone to error, particularly in real time. Errors result from revisions to the data and unavoidable end-point problems associated with the econometric techniques used to estimate it. Copyright 2005 The Economic Society Of Australia.

Suggested Citation

  • David Gruen & Tim Robinson & Andrew Stone, 2005. "Output Gaps In Real Time: How Reliable Are They?," The Economic Record, The Economic Society of Australia, vol. 81(252), pages 6-18, March.
  • Handle: RePEc:bla:ecorec:v:81:y:2005:i:252:p:6-18
    as

    Download full text from publisher

    File URL: http://www.blackwell-synergy.com/servlet/useragent?func=synergy&synergyAction=showTOC&journalCode=ecor&volume=81&issue=252&year=2005&part=null
    File Function: link to full text
    Download Restriction: Access to full text is restricted to subscribers.

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Nelson, Edward & Nikolov, Kalin, 2003. "UK inflation in the 1970s and 1980s: the role of output gap mismeasurement," Journal of Economics and Business, Elsevier, pages 353-370.
    2. Randall Wray, 1993. "Government Deficits, Liquidity Preference, and Schumpeterian Innovation," Economics Working Paper Archive wp_99, Levy Economics Institute.
    3. Athanasios Orphanides & Simon van Norden, 2002. "The Unreliability of Output-Gap Estimates in Real Time," The Review of Economics and Statistics, MIT Press, pages 569-583.
    4. Robert J. Gordon, 1997. "The Time-Varying NAIRU and Its Implications for Economic Policy," Journal of Economic Perspectives, American Economic Association, pages 11-32.
    5. Orphanides, Athanasios, 2003. "The quest for prosperity without inflation," Journal of Monetary Economics, Elsevier, pages 633-663.
    6. Hördahl, Peter, 2000. "Estimating the Implied Distribution of the Future Short-Term Interest Rate Using the Longstaff-Schwartz Model," Working Paper Series 111, Sveriges Riksbank (Central Bank of Sweden).
    7. Sargent, Thomas J, 1971. "A Note on the 'Accelerationist' Controversy," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 3(3), pages 721-725, August.
    8. Hirose, Yasuo & Kamada, Koichiro, 2003. "A New Technique for Simultaneous Estimation of Potential Output and the Phillips Curve," Monetary and Economic Studies, Institute for Monetary and Economic Studies, Bank of Japan, pages 93-112.
    9. David Gruen & Tim Robinson & Andrew Stone, 2002. "Output Gaps in Real Time: Are They Reliable Enough to Use for Monetary Policy?," RBA Research Discussion Papers rdp2002-06, Reserve Bank of Australia.
    10. Tim Robinson & Andrew Stone & Marileze van Zyl, 2003. "The Real-time Forecasting Performance of Phillips Curves," RBA Research Discussion Papers rdp2003-12, Reserve Bank of Australia.
    11. Dungey, Mardi & Pitchford, John, 2000. "The Steady Inflation Rate of Economic Growth," The Economic Record, The Economic Society of Australia, pages 386-400.
    12. Orphanides, Athanasios, 2003. "The quest for prosperity without inflation," Journal of Monetary Economics, Elsevier, pages 633-663.
    13. Guy Debelle & Douglas Laxton, 1997. "Is the Phillips Curve Really a Curve? Some Evidence for Canada, the United Kingdom, and the United States," IMF Staff Papers, Palgrave Macmillan, vol. 44(2), pages 249-282, June.
    14. Dungey, Mardi & Pitchford, John, 2000. "The Steady Inflation Rate of Economic Growth," The Economic Record, The Economic Society of Australia, pages 386-400.
    15. Edward J. Green & Richard M. Todd, 2001. "Thoughts on the Fed's role in the payments system," Annual Report, Federal Reserve Bank of Minneapolis, issue Apr, pages 6-27.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. David Norman & Anthony Richards, 2012. "The Forecasting Performance of Single Equation Models of Inflation," The Economic Record, The Economic Society of Australia, vol. 88(280), pages 64-78, March.
    2. Isabell Koske & Nigel Pain, 2008. "The Usefulness of Output Gaps for Policy Analysis," OECD Economics Department Working Papers 621, OECD Publishing.
    3. Lucie Schmidt & Purvi Sevak, 2006. "Taxes, Wages, and the Labor Supply of Older Americans," Working Papers wp139, University of Michigan, Michigan Retirement Research Center.
    4. David Gruen & Amanda Sayegh, 2005. "The evolution of fiscal policy in Australia," Treasury Working Papers 2005-04, The Treasury, Australian Government, revised Nov 2005.
    5. Arslanturk, Yalcin & Balcilar, Mehmet & Ozdemir, Zeynel Abidin, 2011. "Time-varying linkages between tourism receipts and economic growth in a small open economy," Economic Modelling, Elsevier, pages 664-671.
    6. Tony McDonald & Yong Hong Yan & Blake Ford & David Stephan, 2010. "Estimating the structural budget balance of the Australian Government," Economic Roundup, The Treasury, Australian Government, pages 51-79.
    7. Andrew Stone & Troy Wheatley & Louise Wilkinson, 2005. "A Small Model of the Australian Macroeconomy: An Update," RBA Research Discussion Papers rdp2005-11, Reserve Bank of Australia.
    8. Iscan, Talan B., 2011. "Productivity growth and the U.S. saving rate," Economic Modelling, Elsevier, pages 501-514.
    9. Marina Della Giusta & Maria Laura Di Tommaso & Isilda Shima & Steinar Strøm, 2009. "What money buys: clients of street sex workers in the US," Applied Economics, Taylor & Francis Journals, vol. 41(18), pages 2261-2277.
    10. Rochelle M. Edge & Jeremy B. Rudd, 2016. "Real-Time Properties of the Federal Reserve's Output Gap," The Review of Economics and Statistics, MIT Press, pages 785-791.
    11. Kuttner, Ken & Robinson, Tim, 2010. "Understanding the flattening Phillips curve," The North American Journal of Economics and Finance, Elsevier, pages 110-125.
    12. David Gruen & Amanda Sayegh, 2005. "The Evolution of Fiscal Policy in Australia," Oxford Review of Economic Policy, Oxford University Press, vol. 21(4), pages 618-635, Winter.
    13. Kevin Lee & Nilss Olekalns & Kalvinder Shields & Zheng Wang, 2012. "Australian Real-Time Database: An Overview and an Illustration of its Use in Business Cycle Analysis," The Economic Record, The Economic Society of Australia, vol. 88(283), pages 495-516, December.
    14. Hilde Bjørnland & Leif Brubakk & Anne Jore, 2008. "Forecasting inflation with an uncertain output gap," Empirical Economics, Springer, pages 413-436.
    15. Ken Kuttner & Tim Robinson, 2008. "Understanding the Flattening Phillips Curve," RBA Research Discussion Papers rdp2008-05, Reserve Bank of Australia.
    16. Hilde Bjørnland & Leif Brubakk & Anne Jore, 2008. "Forecasting inflation with an uncertain output gap," Empirical Economics, Springer, pages 413-436.
    17. Kevin Lee, Nilss Olekalns, Kalvinder Shields and Zheng Wang, 2011. "The Australian Real?Time Datbase: An Overview and an Illustration of its Use in Business Cycle Analysis," Department of Economics - Working Papers Series 1132, The University of Melbourne.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:ecorec:v:81:y:2005:i:252:p:6-18. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Wiley-Blackwell Digital Licensing) or (Christopher F. Baum). General contact details of provider: http://edirc.repec.org/data/esausea.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.