Dees, Stephane; Pesaran, M. Hashem; Smith, L. Vanessa; … - 2021
variables (typically the output gap) and solving the model for inflation in terms of the observables. In practice, the equation … not be appropriate. Thirdly, there are arguments that other variables, e.g.interest rates, foreign inflation and foreign … theoretically consistent measure of the steady state and provides a natural route for foreign inflation or output gap to enter the …