An Alternative Approach to Measuring Output Gap

Year, pages: 2006, 337 - 351

This paper tries to identify inflationary pressures in Slovak economy by two methods. The first method uses concept of output gap considered as a main determinant of inflation dynamics. The traditional output gap is estimated by structural vector autoregressive (SVAR) technique. An emphasis of the paper is however placed on a new way of looking at inflation dynamics. An explicitly optimizing general equilibrium framework in the presence of nominal rigidities suggests marginal cost as an alternative measure of inflation. The second method, based on this framework, uses real unit labor cost in order to identify inflationary pressures in Slovak economy.

Zeman, J. 2006. An Alternative Approach to Measuring Output Gap. In Ekonomický časopis/Journal of Economics, vol. 54, no.4, pp. 337-351. 0013-3035.

Zeman, J. (2006). An Alternative Approach to Measuring Output Gap. Ekonomický časopis/Journal of Economics, 54(4), 337-351. 0013-3035.