Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/93073
Authors: 
Boysen-Hogrefe, Jens
Year of Publication: 
2014
Series/Report no.: 
Kiel Working Paper 1908
Abstract: 
Output gap estimates at the current edge are subject to severe revisions. This study analyzes whether monetary aggregates can be used to improve the reliability of early output gap estimates as proposed by several theoretical models. A real-time experiment shows that real M1 can improve output gap estimates for euro area data. For many periods the cyclical component of real M1 shows good results, while a forecasting strategy based on projecting GDP series seems to be more robust and provides superior results during the Great Recession. Broader monetary aggregates provide no superior information for output gap estimates.
Subjects: 
output gap
real-time data
M1
M3
euro area
money cycle
JEL: 
E32
E37
E41
E58
Document Type: 
Working Paper

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