This paper empirically studies the predictability of emerging markets’ stock returns by business cycle variables and the role of developed markets’ business cycle dynamics in this respect. The evidence shows that the link between business cycles and future stock market returns among emerging...

It is generally accepted, that output gap belongs to the main indicators of inflationary pressures and is often used by central banks when executing monetary policy. When output gap is positive, there are inflationary pressures in economy and inflation will rise. In case, that there is negative...

What drives the output gap? Contrary to standard agnostic statistical approaches, New Keynesian small open economy models allow decomposing the output gap into its shocks and confirm the conventional wisdom that most of the variation is due to foreign shocks. However, the risk premium shock also...

This paper assesses the degree of readiness of New Member States (NMS) of the EU, including Romania, to adopt euro, mainly based on an optimal currency area (OCA) criterium. Using three consensus measures of output gap based on revisions of the estimated output gaps computed by 5 filtering...

There have been several data revisions to output statistics in Estonia during the past six years as methodologies have been harmonised. These changes are significant enough to require corrections to the earlier understanding of Estonia’s potential economic growth rate. In this paper the latest...

This paper uses the Kalman filter to estimate potential output as a latent process. We estimate two Dynamic Linear Models, comparing the results obtained through a traditional and a New Keynesian model. We verify that the traditional measures of output gap, even if usually applied in the...

The New Keynesian Phillips curve implies that the output gap, the deviation of the actual output from its natural level due to nominal rigidities, drives the dynamics of inflation relative to expected inflation and lagged inflation. This paper exploits the empirical success of the New Keynesian...

The purpose of the analysis is to assess the impact of the crisis on the potential output and output gaps, to study their evolution by using a comparative approach for a sample of EU countries that were in majority included recently in financial assistance and macroeconomic adjustment...

In this study we show that inflation rate and current account evolved in line with some historical patterns, once the global financial and economic crisis hit Romania in the latter part of 2008. Core inflation declined at a relatively fast pace for a long period of time. It reached negative...

This article aims to analyze the sustainable development of tourism in Romania, given its cyclical movements generated by using seasonal resources. For this we used output gap indicator, defined as the difference between real GDP and potential GDP. Output gap indicates disparity in the real...