Output Gap

The question referring to the reasons for which the differentiate growth rates across countries occurs is one of the most debated subjects within the economic literature. A common feature of the majority of these papers is the importance and the heaviness of the political institutions in the growth path of a country. In this study we will discuss three main characteristics of political institutions by endeavouring their contribution and effects on economic growth. The essential political conditions for growth will be determined using a model that integrates political factors into an endogenous growth model and derives the effects of political repression, political stability and policy certainty on economic growth. Next, we will asses in what extent the political context influences an individual’s economic and rational choice. To highlight the impact of the three political dimensions: political freedom, political stability and policy certainty we will discuss the specificity of econo...

IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

The Tax-to-GDP ratio is an important tool for both economists and policymakers. Despite its pivotal role, this indicator is measured and analyzed without due attention to the potential biases stemming from the so called non-observed economy. This note aims at filling this gap, pointing out the effects of untaxed and undeclared incomes on both sides of the Tax-to-GDP ratio. The opinions expressed herein are those of the author and not necessarily reflect the views of the ISAE.

The main focus of this paper is the relation between the cyclical components of total revenues and expenditures and the budget balance in France, Germany, Portugal, and Spain. We try to uncover past trends behind the development of public finances that contribute to explaining the current stance of fiscal policy. The disaggregate analysis of fiscal policy in an SVAR that mixes long and short-term constraints allows us to look into the transmission channels of fiscal policy and to derive a model-based indicator of structural balance. The main conclusions are that fiscal slippages are mainly due to reversals in tax policies, which are unmatched by expenditure adjustments. As a consequence, deficits rise when economic conditions worsen but cause a 'ratcheting up' in the size of government in economic booms. The Stability and Growth Pact has not eradicated these procyclical policies. Bad policies in good times also contribute to aggregate macroeconomic instability.

We use a general equilibrium model to show that a decrease in workers' bargaining power amplifies the relative contribution to the output gap of adjustments along the extensive margin of labour utilization. This mechanism reduces the cyclical movements of marginal cost (and inflation) relative to those of the output gap. We show that the relationship between bargaining power and adjustments along the extensive margin (relative to the intensive margin) is supported by microdata. Our analysis relies on panel data from the Italian survey of industrial firms. The Bayesian estimation of the model using euro-area aggregate data covering the 1970-1990 and 1991-2016 samples confirms that the decline in workers' bargaining power has weakened the inflation-output gap relationship.

The labor market is receiving increasing attention in the New Keynesian literature. In this paper I critically survey this literature in order to highlight the role played by wage rigidities in the explanation of fluctuations caused by technology shocks. To this aim, I present a DSGE model with sticky prices, nominal wage rigidities, and hiring costs. The comparison between this model and Blanchard and Gali (2006) highlights the non trivial differences which exist in the way nominal wage and real wage rigidities drive the economy's dynamics. My conclusion is that models incorporating nominal wage rigidities and some degree of price stickiness provide a better account of macroeconomic dynamics than models with real wage rigidities.

Stagflația" desemnează coexistența stagnării economiei, șomajului ridicat și inflației persistente. Combinarea "stagnării" cu "inflația" contrazice teoria economică clasică, după care inflația este asociată cu boom-ul economic, iar scăderea prețurilor, cu recesiunea. Stagflația constituie o dilemă pentru economiști și autorități, deoarece măsurile necesare pentru stoparea inflației împiedică relansarea economiei și duc la creșterea șomajului-și invers.

Resumen: Con modelos estructurales de series de tiempo calculamos el producto potencial, la brecha del producto y los ciclos económicos de corto plazo del PIB de México (1980México ( .1-2006.4.4). Encontramos que: a) el crecimiento del producto potencial ha variado notablemente para dos periodos claramente definidos: 2.1% (1980.4-1994.4) y 3.7% (1995.4-2006.4); b) hay fuerte estacionalidad: los trimestres 1 y 3, y 2 y 4 son de menor y de mayor crecimiento respectivamente; c) desde el año 2000 la economía mexicana tiene un crecimiento más estable.

The paper empirically examines the validity of Keynesian philosophy of contracyclical variation in fiscal policy to the macroeconomic activity in India. The macroeconomic activity is proxied by ‘output gap ’ a concept defined to estimate the index of economic activity. Applying Johansen’s Full Information Maximum Likelihood test of cointegration, it was found that there exists a long run, stable relationship between fiscal policy stance and macroeconomic activity. Further, the causality detection in asymmetric vector autoregression model revealed that there exists feedback mechanism between fiscal policy stance and output gap, which reinforces the Keynesian theory that fiscal stance is contracyclical in nature. The policy implication of these results points to the fallacy of rule-based fiscal policy to contain fiscal deficit, based on the neo-classical assumption that fiscal deficit has detrimental effects through financial crowding out. The results reinforced the role of fiscal def...

The authors solve the IS puzzle for the G7 countries. They find that five of the G7 countries have the expected significant negative relationship between the output gap and the realrate gap; the time series of the remaining two show material deviation from expected IScurve behavior. The authors show that the observed time dependence of the interaction between the output and real-rate gaps can be represented in a parsimonious and practical manner using the theory of anelasticity that unifies partial-adjustment specifications of the IS curve.

By Jacques A n a s and Muriel N g u i f f o -B o y o m ** Summary "[...] in many situations a decision does not have to be made immediately, but can be delayed until additional information has been acquired. Sequential analysis seems particularly applicable to the problem of predicting turning points in the business cycle" (Palash and Radecki, 1985). Elaborating on this idea, we propose a new approach to predict cyclical turning points in the Euro-zone using the Neftçi's approach. The output is a probability index for a forthcoming economic turning point. * Prepared for the DIW Workshop on "Measurement Problems of Business Cycles in the EMU", Berlin, 2 February 2001. ** Centre d'Observation Economique (27 avenue de Friedland, F-75382 Paris cedex 08) and Centre d'Econométrie (University Paris II-Pantheon Assas). The views expressed in this paper are those of the authors and do not necessarily reflect the views of the Centre d'Observation Economique from the Chamber of Commerce and Industry of Paris. We are grateful to Laurent Ferrara and Paolo Guarda for their helpful comments and to Anne de Guernon for her translation and editing support.

This paper investigates empirically the extent to which the ten new countries of the recent EU enlargement are ready to join the European Monetary Union (EMU). We assess the prospects of successful accession into the EMU using cointegration and common trends analysis on the nominal convergence criteria specified by the Maastricht Treaty as well as on real exchange rates and real per capita GDPs. The empirical results indicate that the enlargement countries are partially ready to join the Eurozone, and need further adjustments in their government policies to be fully prepared for joining the EMU.

We develop a new version of the production function (PF) approach usually used for estimating the output gap of the euro area. Our version does not call for any (often imprecise) measure of the capital stock and improves the estimation of the trend total factor productivity. We asses this approach by comparing it with two other multivariate methods mostly used for output gap estimates, a multivariate unobserved components (MUC) model and a Structural Vector Auto-Regressive (SVAR) model. The comparison is conducted by relying on assessment criteria such as the concordance of the turning points chronology with a reference one, the inflation forecasting power and the real-time consistency of the estimates. Two contributions are achieved. Firstly, we take into account data revisions and their impact on the output gap estimates by using vintage datasets coming from the Euro Area Business Cycle (EABCN) Real-Time Data-Base (RTDB). Secondly, the PF approach, generally employed by policy-makers despite of its difficult implementation, is assessed. We thus improve on previous papers which limited their assessment on other multivariate methods, e.g. MUC or SVAR models. The different methods show different ranks in relation to the three criteria. This new PF estimate appears highly concordant with the reference chronology. Its forecasting power appears favourable only for the shortest horizon (1 month). Finally, the SVAR model appears more consistent in real-time.

This paper uses an aggregated small-scale macroeconomic model to study the monetary transmission mechanism in Jamaica. It also simulates the behaviour of the economy under different monetary policy rules. There is a direct transmission from interest rates to exchange rates through portfolio substitution, which is reflected in and reinforced by changes in domestic liquidity conditions. Monetary policy has the greatest impact on inflation in the second quarter after the innovation. Inflation stabilization is achieved mainly through the exchange rate, which itself reflects the combined effect of policy on asset portfolios and aggregate demand. The output gap plays a minor role in terms of a direct impact on inflation and is affected by monetary policy through the credit channel and the real exchange rate. While the monetary authority should continue with the intermediate regime of inflation targeting lite, the paper recommends the adoption of a more forecast based policy rule. Given the monetary transmission process, the change in the exchange rate is the most appropriate intermediate target. Irrespective of the policy rule, there are gains to be had from greater interest rate smoothing in the pursuit of price stability.

We study the channels of interstate risk sharing in Germany for the time period 1970 to 2006 following the methodology of Asdrubali et al. (1996). Their framework allows us to estimate the degree of smoothing of a shock to a state's gross domestic product by factor markets, the government sector, and credit markets, respectively. For the time period from 1970 to 1994pre-unification Germany -we find that about 19 percent of shocks to a state's gross domestic product (GDP) are smoothed by private factor markets, 50 percent are smoothed by the German government sector, and a further 17 percent are smoothed through credit markets. For the post-reunification period, 1995 to 2006, the relative importance of the smoothing channels changes. In the complete sample, factor markets contribute around 50.5 percent to consumption smoothing, and credit markets contribute another 17.5 percent. The government sector's role is diminished: it smoothes around 10 percent of a shock. For this period, we also split our sample between West and East German states. In West Germany, 63 percent of idiosyncratic income shocks are smoothed out by factor markets; and another 15 percent by the government sector. In East Germany, factor markets smooth about 34.5 percent of the volatility in state GDP, the government sector about 19 percent, and another 18 percent are smoothed by credit markets.

Enflasyon ve faiz oranları arasındaki ilişki iktisat literatüründe tartışmalı ve özel bir konuma sahiptir. Bu ilişkinin ampirik olarak incelenmesi hem teorik olarak hem de ekonomi politikalarının şekillenmesi açısından oldukça önemlidir. 1923 yılında, A.H. Gibson Britanya ekonomisi özelinde yaptığı çalışmada, toptan eşya fiyat endeksi ve uzun vadeli tahvil faizleri arasında güçlü bir pozitif korelasyon olduğunu öne sürmüştür. Gibson’un bu teorisi Keynes’in Klasik Faiz Teorisi ile yani “faiz oranları, uzun dönemde genel fiyat düzeyindeki değişimlerden bağımsızdır” görüşüyle çeliştiği için literatüre “Gibson Paradoksu” olarak geçmiştir. Literatürde Gibson Paradoksu’nu konu alan birçok çalışma yapılmıştır. Çalışmaların bir kısmı paradoksa yönelik katkı ve eleştirileri, bir kısmı da belirli ülke veya ülke grubunda bu paradoksun geçerliliğini konu almaktadır. Bu çalışmada da 2008-2023 dönemi için yeni sanayileşen ülkeler özelinde Gibson Paradoksu’nun geçerliliğini sınanmıştır. Çalışmada veri seti olarak faiz (bağımlı değişken), tüketici fiyat endeksi (bağımsız değişken) ve M3 (kontrol değişken) yıllık frekanslar şeklinde kullanılmıştır. Çalışmada uygun panel veri modelinin tespit edilmesi için, Hausman, F, Chov ve LR testleri yapılmıştır. Bu testlerin sonucuna göre, ampirik modelin birim bazlı rassal etkiler modeli olduğuna karar verilmiştir. Tahmin edilen model üzerinde yapılan spesifikasyon testleri sonucunda; değişen varyans, otokorelasyon ve birimlerarası korelasyonun varlığı tespit edilmiştir. Bu durumlar göz önünde bulundurularak dirençli tahminciler BECK-KATZ ve Driscoll-Kraay ile analizler gerçekleştirilmiştir. Driscoll-Kraay yönteminde elde edilen sonuçlar, tüketici fiyat endeksinde meydana gelen 1 birimlik artışın faiz oranlarında 0.26 bir artışa neden olacağını ön görmektedir. BECK-KATZ tahmincisine göre ise tüketici fiyat endeksinde 1 birimlik artışın faiz oranlarında 0.23 artış meydana getireceği tespit edilmiştir. Bu sonuçlardan hareketle 2008-2023 dönemi için yeni sanayileşen ülkelerde Gibson Paradoksunun varlığından söz edilebilir.

We develop a new version of the production function (PF) approach for estimating the output gap of the euro area. Assuming a CES (constant elasticity of substitution) technology, our model does not call for any (often imprecise) measure of the capital stock and improves the estimation of the trend total factor productivity using a multivariate unobserved components model. With real‐time data, we assess this approach by comparing it with the Hodrick–Prescott (HP) filter and with a Cobb–Douglas PF approach with common cycle and implemented with a multivariate unobserved components model. Our new PF estimate appears highly concordant with the reference chronology of turning points and has better real‐time properties than the univariate HP filter for sufficiently long time horizons. Its inflation forecasting power appears, like the other multivariate approach, less favourable than the statistical univariate method. Copyright © 2009 John Wiley & Sons, Ltd.

We follow in estimating via Maximum Likelihood a log-linear consumption function on UK data. In doing so we consider various habit formation assumptions. We show that a model of purely "external" habits as in fits the UK data remarkably well, and possibly in a superior way than US data where, according to our estimates, consumers' habits look more "internal" in that they appear indexed to past average consumption of only a subset of (peer) consumers in the economy, rather than total past per capita consumption. We also find that for about one seventh of UK consumers, current consumption equals current income¾a strong violation of the permanent income hypothesis. Embedded in a sticky price-sticky inflation open-economy monetary model, the model that we estimate helps mimic the hump-shaped response of the output gap to income and interest rate shocks observed in the UK. Estimates of output Euler equations for the UK using a similar method agree with our general results. The consumption and output models that we estimate forecast significantly better than unrestricted open-economy VARs.

The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate. We develop a optimal rules-based interpretation of the 'three pillars macroeconomic policy framework': a combination of a freely floating exchange rate, an explicit target for inflation, and a mechanism than ensures a stable government debt-GDP ratio around a specified long run. We show how such monetary-fiscal rules need to be adjusted to accommodate specific features of emerging market economies. The model takes the form of two-blocs, a DSGE emerging small open economy interacting with the rest of the world and features, in particular, financial frictions It is calibrated using Chile and US data. Alongside the optimal Ramsey policy benchmark, we model the three pillars as simple monetary and fiscal rules including and both domestic and CPI inflation targeting interest rate rules alongside a 'Structural Surplus Fiscal Rule' as followed recently in Chile. A comparison with a fixed exchange rate regime is made. We find that domestic inflation targeting is superior to partially or implicitly (through a CPI inflation target) or fully attempting to stabilizing the exchange rate. Financial frictions require fiscal policy to play a bigger role and lead to an increase in the costs associated with simple rules as opposed to the fully optimal policy.

We follow in estimating via Maximum Likelihood a log-linear consumption function on UK data. In doing so we consider various habit formation assumptions. We show that a model of purely "external" habits as in fits the UK data remarkably well, and possibly in a superior way than US data where, according to our estimates, consumers' habits look more "internal" in that they appear indexed to past average consumption of only a subset of (peer) consumers in the economy, rather than total past per capita consumption. We also find that for about one seventh of UK consumers, current consumption equals current income¾a strong violation of the permanent income hypothesis. Embedded in a sticky price-sticky inflation open-economy monetary model, the model that we estimate helps mimic the hump-shaped response of the output gap to income and interest rate shocks observed in the UK. Estimates of output Euler equations for the UK using a similar method agree with our general results. The consumption and output models that we estimate forecast significantly better than unrestricted open-economy VARs.

Monetary Conditions Indices (MCIs) are weighted averages of changes in an interest rate and an exchange rate relative to their values in a base period. A few central banks calculate MCIs for use in monetary policy. Although the Bank of England does not calculate such an index, several international organizations as well as financial corporations construct MCIs for the UK on a regular basis. In this article we survey those indices and compare their performance. We also suggest an alternative MCI for the UK to be used as a coincident indicator of stance, obtained estimating and simulating a small-scale macro-econometric model over the period 1984 Q4-1999 Q3. To overcome familiar criticisms of MCIs, our measure innovates upon existing MCIs in several respects. In this sense it may be more informative than those in understanding whether an existing level of interest rates, given the existing level of sterling, makes monetary policy "tighter" or "looser" than in previous periods.

An understanding of business cycles and the optimal policy response to their presence still lies at the heart of macroeconomic research. Starting with the contributions of John Maynard Keynes, we have witnessed ongoing intellectual debate on these issues. Despite the knowledge macroeconomists have gained in both empirical and theoretical work, we still lack a clear understanding of the driving forces of business cycles, and thus continue the search for an appropriate policy response. Recently a new class of models has suggested a fresh approach to business cycle theory. labelled this class of models the "new neoclassical synthesis" (NNS), whereas other authors prefer to call them "new Keynesian models" (Galí 2002). The first title may be an overstatement, and some economists dislike it for this reason (Blanchard 1997). Nevertheless, it indicates one crucial characteristic of the new class of models, which apparently merge two formerly opposed schools of thought. Historically, the first synthesis goes back to Paul A. Samuelson and John R. Hicks who, among other economists in the 1960s, developed and presented the (original) Neoclassical Synthesis. The NNS combines crucial elements of the New Classical Theory, especially of the Real Business Cycle Theory (RBC-theory), with those of the New Keynesian Macroeconomics (NKM).

This paper introduces and describes the new Cornell Beam Research Accelerator, COBRA, the result of a three and one-half year collaboration. The flexible 4 to 5-MV, 100 to 250-kA, 46-ns pulse width accelerator is based on a four-cavity inductive voltage adder (IVA) design. In addition to being a mix of new and existing components, COBRA is unique in the sense that each cavity is driven by a single pulse forming line, and the IVA output polarity may be reversed by rotating the cavities 180° about their vertical axis. Our tests with negative high voltage on the inner MITL stalk indicate that the vacuum power flow has established reasonable azimuthal symmetry within about 2 ns (or 0.6 m) after the cavity output gap. Preliminary results with the accelerator, single cavity, and MITL are presented along with the design details and circuit model predictions

This paper investigates the use of conditioning variables in guiding the accumulation and release phases of a capital buffer requirement for Jamaican banks. An important innovation of this study is the inclusion of public sector conditioning variables to explore the role of sovereign risk build-up in designing countercyclical buffers.

RESUMEN Estimamos una curva de Phillips para Argentina durante el período 2003-2022. Controlando por el tipo de cambio, la inflación tiene una asociación negativa con la tasa de desempleo. Esta relación es unidireccional y asimétrica y opera desde el desempleo hacia la inflación. Un aumento de 1 punto porcentual (pp) en la tasa de desempleo conlleva una caída acumulada de la inflación trimestral de 7,5 pp; en contraste, un aumento de 1 pp en la tasa de inflación tiene un impacto negativo en el desempleo de 1 pp.

Inflation and unemployment, which play a crucial role in ensuring economic stability, have a complex relationship with each other. In this context, the aim of this study is to examine the validity of the Phillips curve in Türkiye by using the variables of general unemployment rate, male unemployment rate, female unemployment rate, Consumer Price Index (CPI), CPI measured by prices of goods and CPI measured by prices of services sector covering the period 2005:1-2024:8. In the analysis part of the study, the stationarity of the variables is tested with the Fractional Frequency Fourier ADF (FFFADF) unit root test. The validity of the Phillips curve between CPI variables and unemployment variables is analyzed separately by Wavelet Transform Coherence (WTC) analysis. When the results of the analysis are analyzed in general, it is concluded that the Phillips curve is not valid in the Turkish economy. Based on the findings, policymakers in the Turkish economy should focus on supply-side policies such as tax cuts and incentives for technological innovations and structural reforms such as increasing the flexibility of the labor market and organizing vocational training programs.

We offer a tale of two major postwar business cycle episodes: the pre-1980s and the post-1982s prior to the Great Recession. We revisit the sources of business cycles and the reasons for the large variations in aggregate volatility from the first to the second episode. Using a medium-scale DSGE model where monetary policy potentially has cost-channel effects, we first show the Fed most likely targeted deviations of output growth from trend growth, not the output gap, for measure of economic activity. When estimating our model with a policy rule reacting to output growth with Bayesian techniques, we find the US economy was not in a state of indeterminacy in either of the two sub-periods. Thus, aggregate instability before 1980 did not result from self-fulfilling changes in inflation expectations. Our evidence shows the Fed reacted more strongly to inflation after 1982. Based on sub-period estimates, we find that shocks to the marginal efficiency of investment largely drove the cyclic...

Low inflation is not perceived as a potential threat to determinacy and macroeconomic stability. Should the Fed return to a rules-based monetary policy, the prospect of indeterminacy would be particularly acute if the Fed adopted a mixed policy rule with the nominal interest rate responding to the output gap and output growth. This is true for a rate of inflation as low as that observed on average since the early 1990s. This finding contrasts sharply with the existing literature where the threat of indeterminacy was high before 1983 and almost nonexistent afterwards. Key to our result is a strong interaction between low trend inflation, sticky wages and technological trend growth. Accounting for a cost channel of monetary policy and a roundabout production process increases the threat of indeterminacy under low inflation. When removing the output gap or output growth from the mixed rule, we find that a rule responding to output growth sharply widens the scope for stability. By stark contrast, the results obtained under a rule reacting to the output gap only essentially mimic those with the mixed rule.

Inflation in Argentina has been fluctuating between moderate and high levels since 2005. In order to do a contribution to the understanding of its causes, two vECM models are estimated for the period October 2004 to February 2016: the "Monetarist Model" and the "Extended model". Inflation is the dependent variable in both cases. While the money supply and the activity level are the independent variables in both models, the exchange rate and wages are added in the latter. Results show a better information criterion of the second model, which emphasizes the importance of the inertial component and the exchange rate, whereas wages and money supply play a minor but also active role. La inflación en la Argentina ha fluctuado entre niveles moderados y altos desde 2005. Para hacer un aporte en relación a sus causas, se estiman dos modelos vECM para el período octubre 2004 -febrero 2016: el "Modelo Monetarista" y el "Modelo Ampliado". En ambos, la variable explicada es la inflación. En el primero las variables explicativas son la oferta monetaria y el nivel de actividad; en el segundo a las anteriores se agregan el nivel de salarios y el tipo de cambio. Los resultados muestran un mejor criterio de ajuste en el segundo modelo, en el cual se destaca la importancia del componente inercial y del tipo de cambio, mientras que los salarios y la oferta monetaria juegan un papel menor aunque también activo.

This paper develops a method for the estimation of the rate of capacity utilization based on standard growth theory and the Structural VAR estimating technique. The measures of capacity utilization we derive for the US and Canadian economies are compared with widely-used survey measures. We show that the degree of association and synchronization of the two measures for both economies is pretty high, a result that encourages the use of our method as a reliable alternative.

We address the question of whether asymmetry in the business cycle and asymmetry in the persistence of negative versus positive shocks characterises Australian output growth. Using nonlinear time series models we provide some evidence consistent with the idea that Australian output growth is characterised by three distinct phases: contractions, high‐growth recovery periods and ‘normal’ or moderate growth periods. This implies that Australian output fluctuations have a significant transitory component and is supportive of the ‘output‐gaps’ view and ‘plucking’ model view of economic fluctuations. In contrast to recent evidence for the US and Canada however, we find that Australian GDP growth does not exhibit important asymmetries in the responses of output growth to positive and negative shocks.

The paper provides potential output and output gap estimates for the Romanian economy in the period 1998-2008. Our approach consists in combining the production function structural method with several statistical de-trending methods. The contribution of our analysis to the scarce literature dealing with the estimation of the cyclical position of the Romanian economy is twofold. First, we identify the contribution of the production factors to the potential output growth. Second, we aggregate the results obtained through filtering techniques in a consensus estimate, ascribing to each method a weight inversely related to its revision stability. The results suggest for the period 2001-2008 an average annual growth rate of the potential output equal to 5.8%, but on a descending slope, due to the adverse developments in the macroeconomic context.

We examine the conduct of monetary policy as implemented by the European Central Bank (ECB) throughout the euro area. Two distinct but closely related approaches are utilized, both of which rely on the assumption that monetary policy can be usefully characterized in terms of a simple Taylor rule-type of reaction function. First, the ECB policy is assessed against the benchmark of the Bundesbank's reaction function and, second, we impose ad hoc Taylor rules. The policy maker's perception about the equilibrium real interest rate is important. Our analysis suggests that such perceptions may have changed over the period of the ECB's short life.

El objetivo de este artículo es estimar el coeficiente de Okun para Lima en el periodo 1970 -2021. Lo hacemos por medio de la ecuación en brechas con respecto al producto potencial y a la tasa de desempleo natural; y la relación entre cambios en la tasa de desempleo y cambios en el producto no primario. Estimamos también ecuaciones distintas en el auge y en la recesión para ver si los coeficientes son asimétricos en el auge y en la recesión.

In this paper we study, by probabilistic techniques, the convergence of the value function for a two-scale, infinite-dimensional, stochastic controlled system as the ratio between the two evolution speeds diverges. The value function is represented as the solution of a backward stochastic differential equation (BSDE) that it is shown to converge towards a reduced BSDE. The noise is assumed to be additive both in the slow and the fast equations for the state. Some non degeneracy condition on the slow equation are required. The limit BSDE involves the solution of an ergodic BSDE and is itself interpreted as the value function of an auxiliary stochastic control problem on a reduced state space.

Economic Papers are written by the Staff of the Directorate-General for Economic and Financial Affairs, or by experts working in association with them. The Papers are intended to increase awareness of the technical work being done by staff and to seek comments and suggestions for further analysis.

Economic Papers are written by the Staff of the Directorate-General for Economic and Financial Affairs, or by experts working in association with them. The Papers are intended to increase awareness of the technical work being done by staff and to seek comments and suggestions for further analysis.

Emí lia Zim ko vá, Ja ro slav Ba ro chov ský, Uni ver zi ta Ma teja Bela v Ban skej Bys t ri ci Po zna nie ak tu ál ne ho sta vu eko no mi ky je zá kla dom úspeš ných hos po dár sko-po li tických roz hod nu tí. Za žela te¾ ný sa považuje stav, kedy je eko no mic ká ak ti vi ta dlho do bo na udržate¾ nej, pri me ra ne vy so kej a vyváženej úrov ni. Pre kra èo va nie tej to úrov ne je pre hos po dárstvo ve¾ká zá•až spô so buj ú ca eko no mic ké ne rov no váhy. Na o pak, rast eko no mi ky pod jej možnos ti je tak tiež spre vád za ný ne ga tív ny mi eko no mic ký mi javmi. Pro dukè ná med ze ra -roz diel med zi sku toè ným a po ten ci ál nym vý stupom eko no mi kyje dôležitým eko no mic kým in di ká to rom. Pla tí kon venè ná prav da, že cen t rál na ban ka ur èu je krát ko do bé úro ko vé mie ry, kto ré ná sled ne ovplyvòujú agre go va ný do pyt a produkè nú med ze ru a pro stred níc tvom vz•ahov ako Phil lip so vá kriv ka Sven son, 1998; Ger lach, Smets, 1999) ovplyvnia in flá ciu. V prí pa de, že je sku toè ný hos po dár sky rast nad svo jou po ten ci ál nou úrov òou, cen t rál na ban ka sa môže obá va• inflaè ných tla kov a zvý ši• svo ju k¾ úèo vú úro ko vú mie ru. V prí pa de, že je pod úrov òou hos po dár ske ho ras tu, cen t rál na ban ka môže uvažova• o znížení k¾ úèo vých úro ko vých sad zieb a pod po re hos po dár ske ho ras tu. V každom prí pa de in for má cia, èi sa eko no mi ka na chád za nad ale bo pod úrov òou svoj ho po ten ci ál ne ho ras tu pa trí med zi mi mo ri a d ne dôležité pri for mu lo va ní me no vej i ïal ších hos po dár skych po li tík a tiež pri vý poète štruk tu rál nej bi lan cie ve rej ných roz poètov. Cie¾om nášho príspe vku 1 je priblíži• od had po ten ci ál ne ho pro duk tu a pro dukènej med ze ry v slo ven ských pod mi en kach pro stred níc tvom vy bra ných me tód. V prvých èas ti ach po dá va me struè né te o re tic ké vý cho dis ká ana ly zo va nej pro ble ma ti ky a cha rakte ri zu je me me tó dy od ha du pro dukènej med ze ry. Tie sa naj èas tej šie èle nia na šta tis tic ké, štruk tu rál ne a kom bi no va né. Kým šta tis tic ké fil trujú iba pre men nú hrubé ho do má ce ho pro duk tu, štruk tu rál ne a kom bi no va né me tó dy ana ly zujú do py to vé ale bo po nu ko vé príèi ny cyk lic ké ho vý voja hrubé ho do má ce ho pro duk tu. Apli ká cie Hod rick-Prescot to vho fil tra a Cobb-Dougla so vej pro dukènej funk cie za celú eko no mi ku ná sled ne apli ku je me v ïal šej èas ti príspe vku. V zá ve re ana ly zu je me od ve tvo vý rast slo ven skej eko no mi ky a po rov ná va me ho s od ve tvo vým ras tom èes kej eko no mi ky 2 .

The efficiency of macroeconomic policies depends on adequate business cycle approximation. Given that potential output and the output gap (the difference between actual and potential output) are not directly observable, their values need to be estimated using alternative statistical, structural, and combined techniques. In this paper the Hodrick-Prescott filter and the Cobb-Douglass production function has been applied on the Slovak conditions. The pross and coins of both methods are analysed. The Hodrick-Prescott filter does not capture the structural changes, which were significant especially in the first half of analysed period. Thus the Cobb-Douglass production function seems to be more appropriate. It enables to detect particular factors of potential output growth as technological progress, capital and labour. Despite of potential shortcomings, this approach is still widely used by international institutions, governments and researchers.

Simulation serves as a third way of doing science, in contrast to both induction and deduction. The web based modeling may considerably facilitate the execution of simulations by other people. We present examples of agent-based and stochastic models of competition and business processes in economics. We start from as simple as possible models, which have microscopic, agent-based, versions and macroscopic treatment in behavior. Microscopic and macroscopic versions of herding model proposed by Kirman and Bass diffusion of new products are considered in this contribution as two basic ideas.

In this paper, we estimate a New Keynesian Phillips Curve, using real marginal costs as a proxy for the output gap, in the same way proposed by Galí & Gertler (1999). Our results for the Brazilian economy were supportive for Calvo´s theory when tests were performed using real marginal costs as proxy for the true output gap. This outcome comes in line with those obtained for the both US and european economy, despite some natural differences in estimated parameters. Here, in most tests, we had reasonable parameter values (i.e. estimates lying in a very acceptable range, accordingly to the theory).
Considering data deficiencies in Brazil, this is something positive. On empirical grounds, one key conclusion is an apparently deep inflationary culture present in Brazil’s economy. Our tests verified that not only inflationary inertia is much larger than in the US and Europe, but also that brazilian price setters tend to change prices much more frequently than american and european counterparts.

This study investigated the topological phase transition of InSb and InBi under a non-hydrostatic lattice using density functional theory and the WIEN2K code. The results of examining the band structure of InSb and InBi employing the mBJGGA exchange-correlation potential indicate that InSb is a semiconductor with a small band gap and normal band order at the Γ point. At the same time, InBi is a metal with band inversion at the Brillouin zone center. To transform these compounds into topological semiconductors, the lattice of these compounds is subjected to non-hydrostatic lattice expansion. Non-hydrostatic lattice expansion is applied in two ways. Firstly, the lattice constants are expanded in the ab plane while keeping the lattice constant along the caxis constant. Then, the lattice constant is expanded along the c-axis while keeping the lattice constant in the ab plane constant. The calculations indicate that under the influence of both types of nonhydrostatic lattice expansion, with the breaking of cubic symmetry, a transition towards topological semiconductors occurs.

This dissertation consists of three essays on the impact of natural resources on economic and fiscal performance. The first chapter investigates the resource impact on economic growth using a non-parametric minimum-distance matching method. Countries are matched according to their observable characteristics, and the relative growth rates of GDP of each matched pair are computed. In this way, it is possible to analyze the impact of the resources on relative growth rates, rather than on absolute growth rates as has been done in previous studies. Assuming a correlation between observables and unobservables, the matching based on observables may control for unobservables as well. If this assumption is satisfied, matching allows us to control for more variables and to single out the direct effect of the resource abundance variable.

Este documento analiza el comportamiento del mercado accionario
mexicano en diferentes escalas de tiempo utilizando el enfoque de wavelets, con el propósito de obtener información más a detalle de lo que la serie en su forma global no puede brindar. Lo anterior se logra descomponiendo la serie de los rendimientos del principal índice accionario de México (IPC) en diferentes niveles de resolución, aplicando la Transformada wavelet discreta de máximo traslape (TWDMT) y como filtro la función de Daubechies de mínima asimetría MA (8). Los resultados muestran evidencia del fenómeno asimétrico identificado como Gaussianidad-agregativa, en donde la distribución de los rendimientos no es la misma en diferentes escalas de tiempo. Así mismo, la varianza wavelet mostró ser mayor para escalas con menor duración de tiempo cuyas implicaciones, en el marco de Valor en Riesgo, serían pérdidas potenciales mayores en horizontes de inversión de corto tiempo.

This paper analyzes the main Mexican equity index (IPC) behavior at different time scales under a wavelet-based approach, which aims to obtain detailed information about it rather than a global approach. The former is performed by decomposing the IPC returns at different resolution levels using the maxi- mal overlap discrete wavelet transform (MODWT) and the least asymmetric LA (8) Daubechies wavelet as the filtering function. Results show evidence of aggregative-Gaussianity, a type of asymmetric phenomenon in which returns distribution varies at different time scales. Also, the wavelet variance showed a greater value at scales with short-time spans than longer ones, which may result under the Value-at-Risk (VaR) framework in greater potential losses at short-time investment horizons.

A growing body of literature examines alternatives to the rational expectations hypothesis in applied macroeconomics. This paper continues this strand of research, examining the role of survey expectations in the inflation process. It reports three principal findings: (i) short-run inflation expectations appear to have a significant role in explaining U.S. inflation over the past twenty to twenty-five years; (ii) long-run expectations generally do not appear to have a direct influence on U.S. inflation over the same period, although they enter indirectly as a key determinant of the short-run expectations (the restrictions implied by "trend inflation" models of inflation are generally rejected in the data); and (iii) the paper develops a first pass at a structural model that incorporates the features discussed above, employing a "survey operator," and assesses its performance in explaining inflation in the post-war period. JEL Codes: E31, E32. * The views expressed in this article are those of the author and do not necessarily represent those of the Federal Reserve Bank of Boston or the Federal Reserve System. Author contact: Federal Reserve Bank of Boston,

For years, the problems associated with the Lucas critique have loomed over empirical macroeconomics. Since the publication of the classic Lucas (1976) critique, researchers have endeavored to specify models that capture the underlying dynamic decision-making behavior of consumers and firms who require forecasts of future events. By uncovering the "deep" structural parameters that characterize these fundamental behaviors, and by explicitly modeling expectations, it is argued, one can capture the dependence of agents' behavior on the functions describing policy. However, relatively little effort has been devoted to testing the empirical importance of this critique. Can one find specifications that are policy-invariant? This paper develops a set of tests for small macroeconometric models, especially those used for monetary policy analysis, and implements them on a set of models used extensively in the literature. In particular, we attempt to test the robustness of optimizing versus non-optimizing models to changes in the monetary policy regime. In this paper we present evidence that shows that some forward-looking models from the recent literature may be less stable than their better-fitting backward-looking counterparts.

The paper investigates the role of domestic and global determinants of euro area core inflation. We analyse the entire conditional distribution of inflation by estimating a Phillips curve type relationship using an expectile regression approach, extended to capture time-varying effects. The main findings are as follows. First, both the domestic and foreign output gap are significant drivers of euro area core inflation, once external demand pressures are properly orthogonalized in a modified measure of domestic gap. However, the inflationary impact of the domestic component is relatively stronger. Second, the domestic output gap has a bigger influence in the right tail of the conditional distribution of inflation. Third, adding international price pressures in the regression weakens the link between inflation and the foreign output gap. Fourth, in a time-varying perspective, there is an increase in the response of inflation to the domestic gap in the last decade but only at the lower quantiles. Overall, the evidence on the so-called "globalization hypothesis" is mixed: while the pass-through to inflation of foreign prices and the exchange rate increased over time at all quantiles, the impact of global slack remained broadly stable, particularly in the central part of the distribution.

This paper examines the slope of the Phillips Curve (PC) in open and closed New Keynesian model settings by analyzing regional U.S. Metropolitan Statistical Area (MSA) data before and after China's accession to the World Trade Organization (WTO) in 2001. Using this framework, along with an instrumental variable approach based on national import shocks, the findings reveal a steep PC slope of-0.329 before 2001 and-0.47 after 2001. This study extends the existing literature by highlighting the effects of increased U.S. national imports as an instrument to control for tradable good demand.