The (Un)Reliability Of Real-Time Output Gap Estimates With Revised Data

ASU Author/Contributor (non-ASU co-authors, if there are any, appear on document)
Onur Ince Ph.D., Assistant Professor (Creator)
Appalachian State University (ASU )
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Abstract: This paper investigates the differences between real-time and ex-post output gap estimates using a newly-constructed international real-time data set over the period from 1973:Q1 to 2012:Q3. We extend the findings in Orphanides and van Norden (2002) for the United States that the use of ex-post information in calculating potential output, not the data revisions themselves, is the major cause of the difference between real-time and ex-post output gap estimates to nine additional OECD countries. The results are robust to the use of linear, quadratic, Hodrick-Prescott, Baxter-King, and Christiano-Fitzgerald detrending methods. By using quasi real-time methods, reliable real-time output gap estimates can be constructed with revised data.

Additional Information

Ince, Onur & Papell, David H., 2013. "The (un)reliability of real-time output gap estimates with revised data," Economic Modelling, Elsevier, vol. 33(C), pages 713-721. Publisher version of record available at:
Language: English
Date: 2013
Output gap, real-time data, data revision, business cycles

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