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Statistical versus economic output gap measures: evidence from Mongolia

Author

Listed:
  • Julia Bersch

    (International Monetary Fund)

  • Tara M. Sinclair

    (George Washington University)

Abstract

This paper compares the output gap estimates based on a number of different methods. We take advantage of the unique properties of the Mongolian economy in order to evaluate the different approaches. We find that an economic measure derived from a Blanchard and Quah-type joint model of output and inflation provides a more robust estimate of the output gap than the traditional statistical decompositions.

Suggested Citation

  • Julia Bersch & Tara M. Sinclair, 2014. "Statistical versus economic output gap measures: evidence from Mongolia," Economics Bulletin, AccessEcon, vol. 34(3), pages 1864-1874.
    • Handle: RePEc:ebl:ecbull:eb-14-00022
    as

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    References listed on IDEAS

    as
    1. Blanchard, Olivier Jean & Quah, Danny, 1989. "The Dynamic Effects of Aggregate Demand and Supply Disturbances," American Economic Review, American Economic Association, vol. 79(4), pages 655-673, September.
    2. Canova, Fabio, 1998. "Detrending and business cycle facts: A user's guide," Journal of Monetary Economics, Elsevier, vol. 41(3), pages 533-540, May.
    3. Christian J. Murray, 2003. "Cyclical Properties of Baxter-King Filtered Time Series," The Review of Economics and Statistics, MIT Press, vol. 85(2), pages 472-476, May.
    4. Canova, Fabio, 1998. "Detrending and business cycle facts," Journal of Monetary Economics, Elsevier, vol. 41(3), pages 475-512, May.
    5. Lawrence J. Christiano & Terry J. Fitzgerald, 2003. "The Band Pass Filter," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 44(2), pages 435-465, May.
    6. International Monetary Fund, 2010. "Estimates of the Output Gap in Armenia with Applications to Monetary and Fiscal Policy," IMF Working Papers 2010/197, International Monetary Fund.
    7. International Monetary Fund, 2010. "Papua New Guinea: Selected Issues Paper and Statistical Appendix," IMF Staff Country Reports 2010/163, International Monetary Fund.
    8. International Monetary Fund, 2010. "Peru: Selected Issues," IMF Staff Country Reports 2010/099, International Monetary Fund.
    9. Mr. Ebrima A Faal, 2005. "GDP Growth, Potential Output, and Output Gaps in Mexico," IMF Working Papers 2005/093, International Monetary Fund.
    10. Cogley, Timothy & Nason, James M., 1995. "Effects of the Hodrick-Prescott filter on trend and difference stationary time series Implications for business cycle research," Journal of Economic Dynamics and Control, Elsevier, vol. 19(1-2), pages 253-278.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Blanchard-Quah Decomposition; Nonmineral GDP; Hodrick-Prescott Filter; Christiano-Fitzgerald Filter;
    All these keywords.

    JEL classification:

    • E3 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles
    • C2 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables

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