Abstract

We decompose US aggregate output into potential output and the output gap by means of a non-stationary dynamic factor model estimated on a large dataset of macroeconomic indicators, combined with a non-parametric trend-cycle decomposition of the factors. We find that: (1) from the mid-90s to 2008 the US economy operated above its potential; (2) as of 2018:Q4 the labour market was tighter than the goods and services market; and (3) our output gap measure revises modestly in real-time. Due to its purely data-driven nature, our measure is a natural complementary tool to the theoretical models used in policy institutions.

About the presenter’s visit

Matteo Luciani will be visiting the School of Economics on Thursday 12 March 2020.  While here he will be using room 520A Colin Clark Building.  If you would like to meet with him please contact Dr Fu Ouyang who will be his host while at The University of Queensland.  Dr Ouyang can be contacted on  f.ouyang@uq.edu.au.

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Venue

Level 6, Colin Clark Building (#39)
UQ St Lucia campus
Room: 
629