Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/153785
Authors: 
Vetlov, Igor
Hlédik, Tibor
Jonsson, Magnus
Kucsera, Henrik
Pisani, Massimiliano
Year of Publication: 
2011
Series/Report no.: 
ECB Working Paper No. 1351
Abstract: 
In view of the increasing use of Dynamic Stochastic General Equilibrium (DSGE) models in the macroeconomic projections and the policy process, this paper examines, both conceptually and empirically, alternative notions of potential output within DSGE models. Furthermore, it provides historical estimates of potential output/output gaps on the basis of selected DSGE models developed by the European System of Central Banks’ staff. These estimates are compared to the corresponding estimates obtained applying more traditional methods. Finally, the paper assesses the usefulness of the DSGE model-based output gaps for gauging inflationary pressures.
Subjects: 
monetary policy
potential output
simulation and forecasting models
JEL: 
E32
E37
E52
Document Type: 
Working Paper

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