A Multivariate Filter for Measuring Potential Output and the NAIRU: Application to the Czech Republic
31 Pages Posted: 13 Feb 2006
Date Written: March 2004
Abstract
This paper presents a multivariate (MV) methodology for obtaining measures of excess demand that can facilitate discussion of monetary policy issues and improve policy decisions. Using data for the Czech Republic, a growing economy undergoing major structural change, it shows how the use of more information to condition the paths of potential output and the non accelerating inflation rate of unemployment (NAIRU) improves on univariate methods as the Hodrick-Prescott (HP) filter.
Keywords: Phillips Curve, Unemployment, Monetary Policy, Fiscal Policy
JEL Classification: C51, E31, E52
Suggested Citation: Suggested Citation
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