A survey of alternative methodologies for estimating potential output and the output gap

Article Abstract:

Some techniques used to measure potential output were surveyed. Three simple multivariate methodologies were analyzed given the shortcomings of univariate approaches and mechanical filters. The three methods studied were the multivariate Beveridge-Nelson methodology (MBN), the structural VAR methodology with long-run restrictions (LRRO) and Cochrane's methodology (CO). The results showed that significant evidence was provided by LRRO estimates that permanent shocks had more complex dynamics than the random walk assumed in CO and MBN studies.

Research, Evaluation, Economic research, Multivariate analysis

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A generalized method of moments approach to estimating a "structural vector autoregression."

Article Abstract:

A macroeconomic structural model of the American economy is presented and tested by a generalized method of moments approach. The model regards observable variables as intrinsic functions of a set of unobservable shocks or abrupt changes. Incomplete market information coupled with rational expectations is seen as a variable inherent in business cycles. Shocks associated with a growth in money, capital demand and portfolio composition are considered important sources of output fluctuations, inflation rate and interest rate changes.

Usage, Business cycles, Autoregression (Statistics)

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The rise of goods-market competition and the decline in wage indexation: a macroeconomic approach

Article Abstract:

Conditions which give rise to heterogeneity in wage-setting and the linkage between goods-market competition and nominal wage indexation in a multisector economy are identified. The heterogeneity and linkage come about as a function of the price elasticity of demand, which decreases the sensitivity of labor demand and equilibrium employment to aggregate demand shocks, that consequently reduces the incentive to index.

Economics, Research and Development in the Social Sciences and Humanities, Equilibrium (Economics), Labor costs

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