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Filling the gap: open economy considerations for more reliable potential output estimates

DARVAS, ZSOLT, SIMON, ANDRÁS, (2015), “Filling the gap: open economy considerations for more reliable potential output estimates”, Bruegel publications, 22 October

This paper proposes a novel structural model to estimate the equilibrium level of output and reports results for 45 countries. The model is conceptually more appropriate than existing methods by incorporating open economy considerations, which are completely missing from the models of the European Commission, IMF and OECD.

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