Briefing

Is the output gap a faulty gauge for monetary policy?


Abstract: Policymakers look to the output gap as a measure of how the economy is performing. However, different methods of computing the output gap can lead to vastly different results, rendering it a potentially poor guide.

Keywords: Inflation (Finance); Monetary policy;

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Bibliographic Information

Provider: Federal Reserve Bank of Richmond

Part of Series: Richmond Fed Economic Brief

Publication Date: 2010

Issue: Jan

Order Number: 10-01