RGAP - Production Function Output Gap Estimation
The output gap indicates the percentage difference between
the actual output of an economy and its potential. Since
potential output is a latent process, the estimation of the
output gap poses a challenge and numerous filtering techniques
have been proposed. 'RGAP' facilitates the estimation of a
Cobb-Douglas production function type output gap, as suggested
by the European Commission (Havik et al. 2014)
<https://ideas.repec.org/p/euf/ecopap/0535.html>. To that end,
the non-accelerating wage rate of unemployment (NAWRU) and the
trend of total factor productivity (TFP) can be estimated in
two bivariate unobserved component models by means of Kalman
filtering and smoothing. 'RGAP' features a flexible modeling
framework for the appropriate state-space models and offers
frequentist as well as Bayesian estimation techniques.
Additional functionalities include direct access to the 'AMECO'
<https://economy-finance.ec.europa.eu/economic-research-and-databases/economic-databases/ameco-database_en>
database and automated model selection procedures. See the
paper by Streicher (2022)
<http://hdl.handle.net/20.500.11850/552089> for details.
