Real-time output gap estimates unreliable: ECB paper
Real-time estimates of the euro area output gap are unreliable, according to a paper released on Thursday by the European Central Bank (ECB).
The paper, which also studies the forecasting performance of real-time estimations, finds that the method is "characterised by a high degree of uncertainty, much higher than resulting from model and estimation uncertainty only."
The authors carry out an identical analysis for the US as a benchmark and find that although real-time estimates there were "more
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