The Output Gap: the Case of Lithuania

Abstract The produce gap is one of the most important imperceptible macroeconomic variables. Nevertheless, this issue has not been explored deeply in Lithuania so far. The thesis features a group of likely output union methods (linear de-trending, segmented linear de-trending, Hodrick-Prescott filter and production function) giving measures of the output gap in the Lithuanian economy for the years 1995-2005. Historically, incompatible measures tend to co-move and indicate the same sign of the output gap. The Russian crisis stands out as the most influential event during the livelong period in terms of output gap and potential gross domestic product development. Besides, the thesis does not find evidence of authoritative positive relationship between the output gap and swelling in Lithuania. Finally, the thesis illustrates problems in making precise real-time gap estimations and thus ends with a range of possible set for the current state of the output gap. Keywords: output gap, potential output. sidestep of contents COPYRIGHT DECLARATIONI ACKNOWLEDGMENTSII ABSTRACTIII LIST OF set backSV LIST OF FIGURESVI 1INTRODUCTION1 2LITERATURE REVIEW3 3 inclination METHODS5 3.1LINEAR DE- propensityING: SIMPLE LINEAR TREND AND separate TREND6 3.2HODRICK-PRESCOTT FILTER7 3.3PRODUCTION determination APPROACH8 4 data11 5EMPIRICAL FINDINGS12 5.

1SIMPLE LINEAR METHOD:12 5.2SEGMENTED LINEAR TREND METHOD:13 5.3HODRICK-PRESCOTT FILTER15 5.4PRODUCTION FUNCTION16 6DISCUSSION OF THE RESULTS19 6.1CORRELATION AND CONCORDANCE STATISTICS20 6.2THE railroad siding counterpane AND INFLATION22 7HISTORICAL DEVELOPMENT OF POTENTIAL OUTPUT AND THE OUTPUT GAP24 8THE END-SAMPLE PROBLEM AND SOME INSIGHTS INTO THE true SITUATION25 9CONCLUSIONS28 WORKS CITED30 10APPENDICES33 10.1APPENDIX 133 10.2APPENDIX 234 10.3APPENDIX 335 10.4APPENDIX 436 10.5APPENDIX 537 10.6APPENDIX 638 List of tables TABLE 5.1. TESTS FOR UNIT ROOT IN REAL LOGARITHMIC GDP SERIES14... If you want to get a full essay, grade it on our website: Orderessay

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