Estimates of Potential Output and the Neutral Rate for the U.S. Economy

32 Pages Posted: 1 Aug 2018

See all articles by Ali Alichi

Ali Alichi

International Monetary Fund (IMF)

Rania Al-Mashat

International Monetary Fund (IMF)

Hayk Avetisyan

Independent

Jaromír Beneš

International Monetary Fund (IMF)

Olivier Bizimana

International Monetary Fund (IMF)

Aram Butavyan

Independent; Independent

Robert Ford

University of Oxford - Department of Sociology

Narek Ghazaryan

Independent

Vahagn Grigoryan

Central Bank of Armenia

Mane Harutyunyan

Independent

Anahit Hovhannisyan

Independent

Edgar Hovhannisyan

Independent

Hayk Karapetyan

Independent

Mariam Kharaishvili

Independent

Douglas Laxton

International Monetary Fund (IMF) - Research Department

Akaki Liqokeli

Independent

Karolina Matikyan

Independent

Gevorg Minasyan

Independent

Shalva Mkhatrishvili

Independent

Armen Nurbekyan

CBA

Andrei Orlov

Nizhny Novgorod State Technical University

Babken Pashinyan

Independent

Garik Petrosyan

Independent

Yekaterina Rezepina

Independent

Aleksandr Shirkhanyan

Independent

Tamta Sopromadze

Independent

Lusine Torosyan

Independent

Erik Vardanyan

Independent

Hou Wang

International Monetary Fund (IMF)

Date Written: July 2018

Abstract

Estimates of potential output and the neutral short-term interest rate play important roles in policy making. However, such estimates are associated with significant uncertainty and subject to significant revisions. This paper extends the structural multivariate filter methodology by adding a monetary policy block, which allows estimating the neutral rate of interest for the U.S. economy. The addition of the monetary policy block further improves the reliability of the structural multivariate filter.

Keywords: United States, Western Hemisphere, Potential output, Macroeconomic Modeling, Neutral Rate, Model Construction and Estimation, Monetary Policy (Targets, Instruments, and Effects)

JEL Classification: C51, E32, E52, E31

Suggested Citation

Alichi, Ali and Al-Mashat, Rania and Avetisyan, Hayk and Beneš, Jaromír and Bizimana, Olivier and Butavyan, Aram and Ford, Robert and Ghazaryan, Narek and Grigoryan, Vahagn and Harutyunyan, Mane and Hovhannisyan, Anahit and Hovhannisyan, Edgar and Karapetyan, Hayk and Kharaishvili, Mariam and Laxton, Douglas and Liqokeli, Akaki and Matikyan, Karolina and Minasyan, Gevorg and Mkhatrishvili, Shalva and Nurbekyan, Armen and Orlov, Andrei and Pashinyan, Babken and Petrosyan, Garik and Rezepina, Yekaterina and Shirkhanyan, Aleksandr and Sopromadze, Tamta and Torosyan, Lusine and Vardanyan, Erik and Wang, Hou, Estimates of Potential Output and the Neutral Rate for the U.S. Economy (July 2018). IMF Working Paper No. 18/152, Available at SSRN: https://ssrn.com/abstract=3221262

Ali Alichi (Contact Author)

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

Rania Al-Mashat

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

Hayk Avetisyan

Independent

Jaromír Beneš

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

Olivier Bizimana

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

Aram Butavyan

Independent ( email )

Independent ( email )

Robert Ford

University of Oxford - Department of Sociology ( email )

Suite 8
Littlegate House, St. Ebbes Street
Oxford, Oxfordshire, OX1 1PT
United Kingdom

Narek Ghazaryan

Independent

Vahagn Grigoryan

Central Bank of Armenia ( email )

6 Vazgen Sargsyan
Yerevan

Mane Harutyunyan

Independent ( email )

Anahit Hovhannisyan

Independent

Edgar Hovhannisyan

Independent

Hayk Karapetyan

Independent

Mariam Kharaishvili

Independent

Douglas Laxton

International Monetary Fund (IMF) - Research Department ( email )

700 19th Street NW
Washington, DC 20431
United States

Akaki Liqokeli

Independent ( email )

Karolina Matikyan

Independent

Gevorg Minasyan

Independent

Shalva Mkhatrishvili

Independent

Armen Nurbekyan

CBA ( email )

Vazgen Sargsyan 6
Armenia

Andrei Orlov

Nizhny Novgorod State Technical University ( email )

Minin St., 24
Nizhny Novgorod, 603950
Russia

HOME PAGE: http://www.linkedin.com/in/andrei-orlov-911b6077?trk=hp-identity-name

Babken Pashinyan

Independent

Garik Petrosyan

Independent

Yekaterina Rezepina

Independent

Aleksandr Shirkhanyan

Independent

Tamta Sopromadze

Independent

Lusine Torosyan

Independent

Erik Vardanyan

Independent

Hou Wang

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

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