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Tatiana Cesaroni
''Estimating potential output using business survey data in a svar framework''
( 2010, Vol. 30 No.3 )
Potential output and the related concept of output gap play a central role in the macroeconomic policy interventions and evaluations. In particular, the output gap, defined as the difference between actual and potential output, conveys useful information on the cyclical position of a given economy. This paper proposes estimates of the Italian potential output based on a structural VAR model using data coming from business surveys. This kind of data, given their cyclical profile, are particularly useful for detrending purposes, as they allow to include information concerning the business cycle activity. The ability of the cyclical GDP component obtained with the SVAR decomposition to forecast inflation and to detect business cycle turning points over the expansion and recession phases is then performed.
Keywords: output gap, business survey data, structural VAR models, forecast ability
JEL: E3 - Prices, Business Fluctuations, and Cycles: General (includes Measurement and Data)
C3 - Time-Series Models
Manuscript Received : Dec 06 2008 Manuscript Accepted : Aug 26 2010

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