Borio-led BIS team proposes new approach to measure output gap
Attempting to estimate an economy's output gap using structural economic relationships, such as those described by the Phillips curve, has drawbacks which could be minimised by "a more parsimonious and transparent approach to embedding economic information that is less vulnerable to mis-specification", according to a new paper from the Bank for International Settlements (BIS).
The paper, A parsimonious approach to incorporating economic information in measures of potential output by Claudio
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