TY - JOUR
T1 - Measuring potential growth with an estimated DSGE model of Japan’s economy
AU - Fueki, Takuji
AU - Fukunaga, Ichiro
AU - Ichiue, Hibiki
AU - Shirota, Toyoichiro
N1 - Publisher Copyright:
© 2016, European Central Bank. All rights reserved.
PY - 2016/3
Y1 - 2016/3
N2 - In this paper, we calculate the potential output and the output gap using a Bayesian-estimated DSGE model of Japan’s economy. For bridging the gap with conventional measures, we define our measure of potential output as a component of the efficient output generated only by persistent growth rate shocks. Our potential growth displays a high degree of smoothness and moves closely with conventional measures. Moreover, the output gap from our measure of potential output shows better forecasting performance for inflation—in particular, at short horizons—than other measures of output gap.
AB - In this paper, we calculate the potential output and the output gap using a Bayesian-estimated DSGE model of Japan’s economy. For bridging the gap with conventional measures, we define our measure of potential output as a component of the efficient output generated only by persistent growth rate shocks. Our potential growth displays a high degree of smoothness and moves closely with conventional measures. Moreover, the output gap from our measure of potential output shows better forecasting performance for inflation—in particular, at short horizons—than other measures of output gap.
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M3 - Article
AN - SCOPUS:84959509067
SN - 1815-4654
VL - 12
SP - 1
EP - 32
JO - International Journal of Central Banking
JF - International Journal of Central Banking
IS - 1
ER -