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Over the last decades, the estimation of the slack in the economy has become an essential piece of analysis for … policymakers, both on the monetary policy and the fiscal policy front. Output gap estimation techniques have flourished accordingly … uncertainty of the estimates and its use on a real-time basis. This paper presents a methodological approach based on a structural …
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This paper proposes a multi-level dynamic factor model to identify common components in output gap estimates. We pool multiple output gap estimates for 157 countries and decompose them into one global, eight regional, and 157 country-specific cycles. Our approach easily deals with mixed...
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trend. The estimation of the model preferred by the data indicates that, because of negative shocks to trend output during …
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