Economics, Econometrics and Finance
a year ago

New method accurately estimates Brazilian economy's potential output and growth gap.

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Minding the Output Gap: A Hamilton Filter Approach and Updated Estimates for the Brazilian Economy
José Luíz Rossi, José Eduardo Gonçalves de Sousa, Jose Alejandro Gutiérrez Briceño

Paper Summary

The article presents a new method to estimate the potential output and output gap of the Brazilian economy. By using the Hamilton Regression Filter, researchers created a more reliable way to determine the country's Gross Domestic Product level. This approach improves upon previous methods like the Hodrick-Prescott filter and the Production Function Approach. The updated estimates provide a clearer picture of the Brazilian economy's performance.

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