Measuring output gap using New Keynesian model: application to the Czech economy
| Authors | |
|---|---|
| Year of publication | 2010 |
| Type | Article in Proceedings |
| Conference | Mathematical Methods in Economics 2010 |
| MU Faculty or unit | |
| Citation | |
| Web | http://www.econ.muni.cz/~hlousek/papers/gap.pdf |
| Field | Economy |
| Keywords | output gap; New Keynesian model; unemployment |
| Description | This paper deals with estimation of output gap in the Czech economy using New Keynesian model. Data for unemployment and labor share together with calibrated values of structural parameters are used. The output gap is then compared to traditional measure -- detrended GDP. The main difference is that New Keynesian output gap is negative in the whole analyzed period which means that economy is operating under potential. Sensitivity analysis with respect to structural parameters is carried out and some implications for welfare are discussed. |
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