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Alternative Methods of Estimating Potential Output and the Output Gap: An Application to Sweden
Author: Ms. Sweta Chaman Saxena and Ms. Valerie Cerra
Series:
IMF Working Papers
Volume/Issue:
Volume 2000: Issue 059
Language:
English
Publication Date:
01 Mar 2000
DOI:
https://doi.org/10.5089/9781451847932.001
ISBN:
9781451847932
ISSN:
1018-5941
Pages:
33
Keywords:
WP; production function; economic theory; Sweden; Business Cycles; Output Gap; Potential Output; Detrending; Vector Autoregression; Unobserved Components Models; production function approach; HP filter; demand shock; constructed output gap; output gap estimate; price level; Unemployment; Inflation; Unemployment rate
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IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
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This paper reviews a number of different methods that can be used to estimate potential output and the output gap. Measures of potential output and the output gap are useful to help identify the scope for sustainable noninflationary growth and to allow an assessment of the stance of macroeconomic policies. The paper then compares results from some of these methods to the case of Sweden, showing the range of estimates.
Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund