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Uncertainty in the Estimation of Potential Output and Implications for the Conduct of Monetary Policy

Author

Listed:
  • Sra Chuenchoksan

    (Bank of Thailand)

  • Don Nakornthab

    (Bank of Thailand)

  • Surach Tanboon

    (Bank of Thailand)

Abstract
This paper looks at the implications of uncertainty in potential output estimation for the conduct of monetary policy. Our findings of potential output and the output gap for Thailand are based on commonly used methods such as the Hodrick-Prescott filter and unobserved component models. Estimation problems associated with real-time data, parameter uncertainty, and model uncertainty are investigated. In dealing with such uncertainties, we review various solutions from both theoretical and practical aspects of monetary policy design.

Suggested Citation

  • Sra Chuenchoksan & Don Nakornthab & Surach Tanboon, 2008. "Uncertainty in the Estimation of Potential Output and Implications for the Conduct of Monetary Policy," Working Papers 2008-04, Monetary Policy Group, Bank of Thailand.
    • Handle: RePEc:bth:wpaper:2008-04
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    References listed on IDEAS

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    Cited by:

    1. Nasha Ananchotikul & Chayawadee Chai-anant & Krist Dacharux & Manop Udomkerdmongkol, 2009. "Thailand’s Medium-term Macroeconomic Policies: Major Challenges and Appropriate Responses," Working Papers 2009-05, Monetary Policy Group, Bank of Thailand.
    2. Vimut Vanitcharearnthum, 2012. "Model-based Measures of Output Gap: Application to the Thai Economy," Applied Economics Journal, Kasetsart University, Faculty of Economics, Center for Applied Economic Research, vol. 19(2), pages 50-65, December.
    3. Pravilada Wigraiphat & Visit Limsombunchai & Teerat Kittiveja, 2012. "Factors Affecting Households’ Expenditure on Food Away from Home (in Thai)," Applied Economics Journal, Kasetsart University, Faculty of Economics, Center for Applied Economic Research, vol. 19(2), pages 37-49, December.
    4. Chaipat Poonpatpibul & Nutthikarn Vorasangasil & Manatchai Junetrakool & Punjaphut Prasitdechsakul, 2009. "Is There an Alternative to Export-led Growth for Thailand?," Working Papers 2009-02, Monetary Policy Group, Bank of Thailand.

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