Status: Draft -- Not PublishedWill be live at 01/28/2021 07:38
Global Macro Views: Inflation-Consistent Output Gaps
- There’s plenty of evidence that output gaps are difficult to estimate, …
- especially in real time when they matter most for fiscal and monetary policy.
- IMF output gaps were -3.2 and -5.1 percent for the US and Euro zone in 2020.
- We use Phillips curves to compare these gap estimates to levels of core inflation.
- Depressed Euro zone core inflation points to an output gap closer to -8.0 percent, …
- while relatively robust core PCE inflation supports the narrower US gap estimate.