Monday, March 27, 2023

In cooperation with

The recent post-covid, geopolitical and energy crisis period has been characterized by conflicting indicators on whether the economy is below, at or above its potential. This is not least due to the multiplicity of large shocks – supply and demand, external and domestic, temporary or lasting, global, idiosyncratic and sectoral – the heightened uncertainty that surrounds them and their transmission to economies. This complex setting is likely to continue, with climate change and the energy transition as well as secular shifts in global value chains looming. The issue is central due to its important role for adequate monetary, fiscal, and structural policies as well as for inflation forecasting. This workshop takes stock of major institutions’ theoretical and empirical approaches to measure potential output, labor market conditions and other indicators developed to gauge price pressures. The impact of sectoral shifts and various forms of market frictions to economic slack and shortages will be featured prominently.

Scientific coordination
Matthieu Darracq-Paries, ECB; Ernest Gnan, SUERF; Juha Kilponen, Bank of Finland; Alessandro Notarpietro, Banca d’ Italia, and Eva Ortega, Banco de España


Monday, 27 March 2023
Opening and Introduction
Ernest Gnan, SUERF
Juha Kilponen, Bank of Finland
Session 1 - Longer-term implications of supply disruptions, sectoral change and scarring for potential output
Chair: Alessandro Notarpietro, Banca d ‘Italia

From bottlenecks to supply-side headwinds

Deniz Igan, BIS I SUERF presentation

The impact of the COVID-19 shock on euro area potential output: a sectoral approach

Katalin Bodnar, ECB presentation

The scarring effects of deep contractions

David Aikman, King’s College London presentation

Endogenous Technology, Scarring and Fiscal Policy

Michaela Elfsbacka-Schmöller, Bank of Finland presentation
Session 2: Measuring the output gap in times of large shocks – tools and recent advances
Chair: Eva Ortega, Banco de España

Measuring the output gap in times of large shocks

David Sondermann, ECB presentation

A business cycle heatmap for the EU, EA and EU member states

Matthias Strifler and Arto Kokkinen, National Audit Office of Finland (NTV) presentation

Robust Real-Time Estimates of the German Output Gap based on a Multivariate Trend-Cycle Decomposition

Christian Ochsner, German Council of Economic Experts presentation

Evaluating estimates of potential output and output gaps

Bela Szörfi, ECB presentation

FAQ: How do I estimate the output gap?

Fabio Canova, BI Norwegian Business School presentation
Ernest Gnan, SUERF