European Consumer Prices Fall Faster Than Estimated as Energy Costs Drop Aug 15, 2009
The core rate should continue to grind lower as the wide output gap continues to weigh on prices, he said. This should progressively challenge the view that deflationary risks in the euro area are limited. (Bloomberg -- Europe)
Brazil's `Sluggish' Economic Recovery to Allow for 2010 Rate Cut, BNP Says Aug 8, 2009
Brazils economic recovery will be sluggish, keeping the output gap very soft and limiting the risks of inflation, Donadio said. The central bank should keep rates unchanged for a while, but the next move is more likely to be a cut. (Bloomberg -- Latin America)
UK pumps 50bn into economy Aug 7, 2009
"I'm just struck by how backward looking a lot of it is, focusing on the economy in recession and that there is a large output gap," said Ross Walker, an economist at RBS Financial Markets. "We knew all that, what has changed? They seem to be giving much more weight to the backward-looking data rather than believing the better surveys.". (BBC News -- Europe)
Taylor Says Bernanke Gets Rate Rule Right While Goldman Doesn't Understand Jul 25, 2009
The latest data show the contraction easing, which should reduce the output gap, Taylor said ... Its a nice concept, but it very much depends on where you believe the output gap is, Fels said. (Bloomberg)
Transcript of a Media Conference Call on Proposed SDR Allocation Jul 22, 2009
The second element is that even though you're right, people have been talking of green shoots and an exit strategy, et cetera, most forecasters will continue to believe that there will be a significant output gap for at least another few years. Again, the idea is that this is a one-off allocation. (IMF News)
Public Information Notice: IMF Executive Board Concludes 2009 Article IV Consultation with Japan Jul 16, 2009
The accommodative stance was seen as appropriate given the significant output gap and deflationary pressures. Going forward, most Directors supported additional credit easing measures should downside risks materialize or financial stresses resurface, while minimizing risks to the Bank of Japan s balance sheet. (IMF News)
Cutting up the form book Jul 3, 2009
5 percent before corrections aimed at addressing deviations such as an inflation gap and an output gap ... The negative output gap, the difference between rising potential GDP and depressed actual GDP is currently estimated at between four and five percent ... If SARB interest rate policy tries to address both this positive inflation gap and negative output gap simultaneously, the basic targeted prime interest rate of 10. (iAfrica.com)
Fed's Yellen: Rates Could Be Near Zero for Years Jul 1, 2009
"My staff has looked at 12 different ways to calculate the output gap," and every one points to a large gap between current and potential output, Yellen told reporters after a speech in San Francisco. Bets in futures markets on a rate increase as soon as late 2009 are "jumping the gun," she said. (ABC News -- Wire)
Bernanke still a speed demon Jul 1, 2009
Instead, according to his theory, inflation was related only to the output gap. As long as the output gap was negative, that is, if actual gross domestic product (GDP) was below potential GDP, the economy was at no risk of inflation ... Hence, he argued that the central bank had to adopt an aggressive money policy until the output gap closed. (Asia Times Online)
Deflation May Derail Japan Recovery, Cabinet's Chief Economist Saito Says Jun 26, 2009
The output gap, a measure of the balance between demand and supply in the economy and regarded as a key gauge to price trends, fell a record 8. 2 percent in the three months ended March 31, government data show. (Bloomberg -- Japan)
Investment spending in China: Reap what you sow Jun 20, 2009
But the best measure of spare capacity for the economy as a whole the difference between actual and potential GDP, or output gap is probably only about 2% of GDP, compared with an average of almost 7% in the rich world. The large role played by state-owned banks is bound to have resulted in some misallocation of capital, but a recent study by Helen Qiao and Yu Song at Goldman Sachs argues that concerns about overinvestment are exaggerated. (The Economist)
China's recovery won't drive up commodity prices Jun 18, 2009
That theory stated that when an economy was catastrophically hit by a financial crisis, inflation couldn't surface when market demand was weak and the output gap was massive, he said. Citing records dating back to 1997, when the Asian financial crisis began, Wang said that the Chinese economy, in particular, had seen an interesting correlation between price drops and export declines. (Xinhuanet, China)
Revival brings back inflation fears Jun 17, 2009
Goldman Sachs res 00004000 earch note also pointed out that the output gap would continue to shrink and will further exert upward pressure on prices. The growth in broad money (M3) was over 20% on a year-on-year basis in May, way above the central banks target of 17%, hinting at the excess liquidity in the system. (India Times)
Fed Considers Using FOMC Statement to Suppress Rate-Increase Speculation Jun 17, 2009
You say you are going to have a very large output gap for an extended period, and even if the economy picks up you still have a massive resource gap in the labor market ... An output gap is an estimate of the difference between the economys potential to grow given resources such as labor and manufacturing capacity and its actual growth rate. (Bloomberg -- US)
Cees: Grass will be greener in 2010 Jun 5, 2009
Not least global deflation in parts during 2H2009 and very mild inflation in 2010, a large output gap weighing on inflation domestically, further easing of food price inflation and a Rand exchange rate on balance guiding inflation lower rather than worsening it anew. Likely negatives include high administered price increases, upward oil price risks, and wage and salary demands that are backward-looking (and resulting settlements that unduly encourage employment and flexible income losses). (iAfrica.com)
Dodge Says Canadian Deficit Is `Not Inappropriate,' Must Be Reduced Later May 31, 2009
The Canadian federal deficit of 3 percent of GDP, in a year where the output gap is as large as its going to be, is certainly not inappropriate, Dodge, a former deputy minister with the Finance Department, said in remarks at an economics conference in Toronto. Finance Minister said May 26 the budget shortfall in 2009 would be more than C$50 billion, from a previously forecast C$33. (Bloomberg -- Canada)
Hussman: Hyper-Inflation Ahead, Fed to Blame May 27, 2009
Philadelphia Federal Reserve Board President Charles Plosser issued a stern warning that inflation pressures will likely be greater than most anticipate, and dismissed the output gap theory that many point to as a reason why inflation should not be feared, according to Reuters. Plosser said he sees inflation near 1. (Newsmax)
Rates likely to stay low for some time: Fed's Kohn May 25, 2009
"Right now, there's no question in my mind there's a very substantial output gap," he said. In its actions to buttress the economy through a period of crisis, the Fed has taken on some risks both from swings in interest rates as well as from the possibilities that some borrowers could default, Kohn said, adding the Fed has sought to minimize those risks. (Yahoo News -- Press Releases)
Fed Studying Effect of Crisis on Productivity May 24, 2009
"Right now, there's no question in my mind there's a very substantial output gap," he said. Copyright 2009 Reuters News Service. (ABC News -- Wire)
2009 Article IV Consultation with Japan:Concluding Statement of the IMF Mission May 22, 2009
Given a large output gap, inflation is projected to remain mildly negative until 2011 ... Under our baseline scenario, monetary policy should remain accommodative, especially in light of the significant widening of the output gap and downward pressures on prices. (IMF News)
Price hikes offset rand strength May 16, 2009
The balance of risks to inflation has "changed significantly", according to the bank, because of lower food and oil prices and the widening output gap - the spare capacity in the domestic economy that will allow factories to produce more without new investment. The review says recent indicators suggest the economy will "remain under pressure for some time". (Business Report, South Africa)
Credulity caughtin stress test May 13, 2009
Often, negative growth is also accompanied by a negative output gap in an economy (where potential production exceeds actual demand). The calculation of LGD or downturn LGD poses significant challenges to modelers and practitioners. (Asia Times Online)
Transcript of a Press Conference on the International Monetary Fund's World Economic Outlook Apr 28, 2009
Now, one has to realize that in 2010, what we call the output gap, which is the distance between where you'd like to be and where output is, is going to be even larger than in 2009. And, therefore, if something could be done, it would be good. (IMF News)
Inflation Doves Put Faith in Output-Gap Religion: Caroline Baum Apr 17, 2009
Any discussion of inflation -- what it is, what causes it -- comes back to that never-ending debate between money and the output gap ... The other theory of inflation, popular among Keynesian economists and Phillips Curve advocates, is something called the output gap, or the difference between the economys actual and potential output ... There is something superficially appealing about the output gap model. (Bloomberg -- Columnists)
Bernanke Bet on Keynes Has Meltzer Siding With Friedman on Inflation Risks Apr 14, 2009
The Fed is running a laboratory experiment on what drives inflation: the money supply or the output gap, says Laurence Meyer, a former Fed governor and now vice chairman of St. Louis-based Macroeconomic Advisers. How it turns out will do a lot to influence the economic debate, he says, adding that his money is on Bernanke. (Bloomberg)
U.S. recession to end in H2 but unemployment to rise: survey Apr 10, 2009
"The huge output gap created by the recession implies that unemployment will continue to rise well into 2010," it said. The jobless rate surged to 8. (Yahoo News -- Top Stories)
Japan edges closer to deflation Mar 27, 2009
"We expect C.P.I. to turn negative on-year in March and remain negative for at least the rest of this year due to a combination of weaker energy prices and a deterioration in the output gap. Japanese companies are still producing more than consumers want to buy.". Today in Business with Reuters. (International Herald Tribune -- Business)
Rising tide of risk taking lifts Asian stocks Mar 27, 2009
"We expect negative numbers for at least the rest of this year due to a combination of weaker energy prices and a deterioration in the output gap. Japanese companies are still producing more than consumers want to buy,'' said Akira Maekawa, senior economist with UBS in Tokyo. Reuters Today in Business Story Tools Boutique automotive companies have stolen the jump on making electric cars. Readers' most viewed Top 5 Business articles Top 5 Business articles Top 5 Business articles Top 5 Business... (Sydney Morning Herald -- Business)
Markets: Asian stocks rise Mar 27, 2009
"We expect negative numbers for at least the rest of this year due to a combination of weaker energy prices and a deterioration in the output gap. Japanese companies are still producing more than consumers want to buy," said Akira Maekawa, senior economist with UBS in Tokyo. Dealers in the Japanese government bond market were more concerned with the Nikkei's persistent rise, which kept a lid on the bond market. (International Herald Tribune)
Japan Consumer Prices Probably Stalled for Second Month as Deflation Looms Mar 25, 2009
The so-called output gap, a measure of the difference between supply and demand in the economy and a key influence for prices, fell 4. 1 percent in the three months ended December 31, the most since 2003, a government report showed last week. (Bloomberg -- Japan)
Rate cuts not only focus - Mboweni Mar 25, 2009
He again referred to the widening in the output gap - the difference between the potential and the actual output of the economy. South Africa has 4. (Business Report, South Africa)
'I have tremendous faith ... it will get done' Mar 24, 2009
We're going to be running an output gap in this country. Even under pretty reasonable scenarios about what happens in the rest of the world, we'll be running an output gap well into 2011, probably into 2012 ... They seem to be driven by a belief as well, that they have to close the output gap within two years because that's what their mandate says they have to do. (Globe and Mail -- Business)
Aso May Need to Spend More Than $104 Billion on Stimulus, Economists Say Mar 23, 2009
Economists are using the nations output gap, a measure of the balance between supply and demand in the economy, as one indication of how large the package will need to be ... The output gap widened to 4. (Bloomberg -- Japan)
Wholesale Price Declines Accelerate as Commodity, Energy Prices Tumble Mar 11, 2009
The output gap, a measure of the difference between supply and demand in the economy, fell the most in seven years last quarter ... Price declines will accelerate through the middle of this year, in tandem with the deterioration in the economys output gap, said , an economist at RBS Securities in Tokyo. (Bloomberg -- Japan)
TWO VIEWS: Obama's health plan will help every working American Mar 8, 2009
This is not nearly enough to counteract our deep recession: the Congressional Budget Office estimates the output gap -- how much output is below the economy's potential -- at $2. 9 trillion over the next three years. (Fresno Bee -- Opinion)
Lending rate near zero Mar 4, 2009
In its statement, the central bank acknowledged that economic growth through the first half of the year will be weaker than it expected, noting that the output gap the difference between current economic activity and the pace policy makers reckon the economy can set without stoking inflation is wider now than it was at the start of the year. Potential delays in stabilizing the global financial system, along with the larger-than-anticipated confidence and wealth effects on domestic demand, could... (Globe and Mail)
Mboweni keeps SA guessing on rate cut Mar 1, 2009
Another indicator he highlighted was the output gap: the difference between the potential and actual output of an economy ... "Given that the world economy is going to contract quite considerably, the output gap is going to widen," Mboweni said. (Business Report, South Africa)
January Consumer Prices Probably Fell, Signaling Deflation May Resurface Feb 26, 2009
The so-called output gap, a measure of the difference between supply and demand in the economy, fell 4. 3 percent in the three months ended December, the biggest drop in seven years. (Bloomberg -- Japan)
The current state of the macro economy of Ghana Feb 19, 2009
The unpalatable fact is that disinflation requires that a negative output gap, sooner or later, opens up. A negative output gap implies a reduction of aggregate demand below the productive potential of the economy ... This output gap output and employment lost to the economy is a measure of the short-run sacrifice required for disinflation. (Ghana Web, Ghana)
Transcript of a Background Briefing by Senior Officials on the International Monetary Fund's Group of 20 Surveillance Note Feb 9, 2009
Here what we -- we took a little bit more simple approach and looked at the widening of the output gap, or the slowing of growth, and how that applies basically through the revenue channels. So we see some deterioration already starting in 2008 in most of the countries because of the growth slowdown, including in Italy. (IMF News)
