Real-time estimates of output gaps and trends are important tools for macroeconomic analysis. But how accurate are estimates of real-time gaps and trends? This article discusses the problem of estimating gaps and trends in real time and constructs measures of their precision. The analysis is based on band-pass filtering methods augmented with univariate forecasts. The empirical analysis suggests that there is considerable uncertainty associated with real-time estimates of trends and gaps.
Our Research Focus: Economic Growth and Business Cycles
To receive a notification by email when Economic Quarterly is posted online or to order single copies of past issues, click on the links below (published online only since 2012).