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Business and Economics > Production and Operations Management

You are looking at 1 - 2 of 2 items for :

  • Type: Journal Issue x
  • Classification Methods; Cluster Analysis; Principal Components; Factor Models x
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Cover IMF Working Papers
Reading the Stars
Peter D. Williams
,
Mr. Yasser Abdih
, and
Emanuel Kopp
Following the global financial crisis, significant uncertainty has existed around the U.S. economy’s steady state equilibrium. This paper uses a factor model to provide a new approach to estimating “the stars” (i.e. the neutral interest rate, maximum employment, and the level and growth rate of potential output) that are most consistent with a medium-term equilibrium where inflation converges to the FOMC’s two percent target. It is applicable to any country with an inflation targeting central bank. It also explicitly incorporates estimates of the extensive margin of slack in the labor market, which has proven to be an important factor in describing the post-financial crisis landscape.
Keywords:
WP; output gap estimate; PCE inflation; inflation gap; inflation expectation; output gap estimation certainty
Cover IMF Working Papers
Are they All in the Same Boat? the 2000-2001 Growth Slowdown and the G-7 Business Cycle Linkages
Mr. Thomas Helbling
and
Mr. Tamim Bayoumi
This paper reviews the international business cycle among Group of Seven (G-7) countries since 1973 from two angles. An examination of business cycle synchronization among these countries using simple descriptive statistics shows that synchronized slowdowns have been the norm rather than the exception and that the slowdown in 2000-2001 largely followed patterns seen in the past. The paper also identifies the international business cycle with an asymptotic dynamic factor model. Two global factors explain roughly 80 percent of the variance in G-7 output gaps at business cycle frequencies. The factor model decomposes the "common part" of national output fluctuations into two factors, one capturing the average G-7 cycle and one that corrects for phase and amplitude differences. We also found some evidence supporting the hypothesis that global shocks were the main force behind the slowdown in 2000-2001.
Keywords:
WP; business cycle linkage; business cycle frequency; output fluctuation; Business Cycles; International Business Cycles; Dynamic Factor Models; business cycle chronology; business cycle asymmetry; Output gap; Factor models; Global