The Budget Balance in the Medium Term and the Hodrick-Prescott Filter

Bank of Italy – Indicators of Structural Budget Balances Conference, p. 353, 1998

16 Pages Posted: 18 Jul 2012

See all articles by Gerrit van den Dool

Gerrit van den Dool

Organization for Economic Co-Operation and Development (OECD) - Directorate for Employment, Labour and Social Affairs (ELS)

Date Written: November 28, 1998

Abstract

The paper by Van den Dool proposes to accompany a cyclically-adjusted balance, computed using a standard “gap elasticity” approach, with a “structural balance”, calculated as a moving weighted average of the actual balance (using the Hodrick-Prescott filter). The structural balance, in this case, does not aim to adjust the balance only for the effects of economic fluctuations but for all other temporary factors.

Suggested Citation

van den Dool, Gerrit, The Budget Balance in the Medium Term and the Hodrick-Prescott Filter (November 28, 1998). Bank of Italy – Indicators of Structural Budget Balances Conference, p. 353, 1998, Available at SSRN: https://ssrn.com/abstract=2109674

Gerrit Van den Dool (Contact Author)

Organization for Economic Co-Operation and Development (OECD) - Directorate for Employment, Labour and Social Affairs (ELS) ( email )

2 rue Andre Pascal
Paris Cedex 16, 75775
France

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