Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/246110 
Year of Publication: 
2020
Series/Report no.: 
Working Paper No. 7/2020
Publisher: 
Norges Bank, Oslo
Abstract: 
This paper documents the suite of models used by Norges Bank to estimate the output gap. The models are estimated using data on GDP, unemployment, inflation, wages, investment, house prices and credit. We evaluate the estimated output gap series in terms of its forecasting properties, its reliability and its cyclical sensitivity to various measures of demand and supply shocks. A simple un-weighted average of the models features a better forecasting performance than each individual model. In addition, it helps predicting inflation in pseudo real-time and exhibits limited variations when new data become available. The summary measure of potential output responds strongly and rapidly to permanent shocks and to narrative measures of technology shocks but, although to a more limited extent, also to transitory shocks.
Subjects: 
Output Gap
Forecasting Inflation
Cyclical Sensitivity
Output Gap Revisions
JEL: 
C38
E17
E32
Persistent Identifier of the first edition: 
ISBN: 
978-82-8379-155-6
Creative Commons License: 
cc-by-nc-nd Logo
Document Type: 
Working Paper
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