IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Login to save this book or follow this series

Estimation and Use of the Potential GDP for Monetary Policy for the SEACEN Countries

  • Lim Choon Seng, Vincent

The objective of this project is to review methodologies of computing the potential output gaps; to survey of international best practice with respect to the estimation and utilisation of potential output and output gap measures; and to identify weaknesses and strengths of the respective methodology. From the literature review, it is obvious that different approaches and estimation techniques can lead to different estimates as potential GDP is unobservable. It is difficult to know which technique performs better. The unobservable characteristic also implies that it is not possible to know precisely the statistical errors of these estimates. Furthermore three types of errors are possible - statistically uncertainty; inadequacy of the model and errors due to the revision to the real time estimates as a result of new data arrival. Noise introduced into the models as a result of supply shocks would also make the estimation of potential GDP difficult. The objective of this project is to review methodologies of computing the potential output gaps; to survey of international best practice with respect to the estimation and utilisation of potential output and output gap measures; and to identify weaknesses and strengths of the respective methodology. From the literature review, it is obvious that different approaches and estimation techniques can lead to different estimates as potential GDP is unobservable. It is difficult to know which technique performs better. The unobservable characteristic also implies that it is not possible to know precisely the statistical errors of these estimates. Furthermore three types of errors are possible - statistically uncertainty; inadequacy of the model and errors due to the revision to the real time estimates as a result of new data arrival. Noise introduced into the models as a result of supply shocks would also make the estimation of potential GDP difficult.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: http://www.seacen.org/GUI/pdf/publications/research_proj/2007/rp68.pdf
Download Restriction: no

as
in new window

This book is provided by South East Asian Central Banks (SEACEN) Research and Training Centre in its series Research Studies with number rp68 and published in 2007.
ISBN: 983-9478-60-5
Handle: RePEc:sea:rstudy:rp68
Contact details of provider: Postal: Level 5, Sasana Kijang, Bank Negara Malaysia, 2 Jalan Dato? Onn, 50480 Kuala Lumpur
Phone: 603-9195 1888
Fax: 603-9195 1801
Web page: http://edirc.repec.org/data/seacemy.htmlEmail:


More information through EDIRC

No references listed on IDEAS
You can help add them by filling out this form.

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:sea:rstudy:rp68. 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: (Yunyee)

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 references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link 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.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.