Rethinking Potential Output: Embedding Information About the Financial Cycle

March 4th, 2013
in econ_news, syndication

Econintersect:  A new IMF working paper by Claudio Borio, Piti Disyatat and moneyimbalanceMikael Juselius shows that incorporating information about the financial cycle is important to improve measures of potential output and output gaps.  They maintain that "experience indicates that output may be on an unsustainable path even if inflation is low and stable whenever financial imbalances are building up."

A Scribd presentation of the paper is available after the Read more >> jump.

Follow up:

Click Work 404 to download the document.


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