New Working Paper: "Robust Real-Time Estimates of the German Output Gap based on a Multivariate Trend-Cycle Decomposition"

The Chair of Empirical International Economics has published a new working paper.

The link can be found here.

The working paper presents a recent estimate of the German output gap between 1995 and 2022 and a nowcasting scheme that can accurately predict the German output gap up to three months before the release of GDP data.
After only one month of observed data, the mean absolute error of the nowcasts compared to the final estimate is very small (0.28 percentage points). Moreover, international trade and labor market aggregates are shown to consistently explain a large share of the variation in the German output gap. Moreover, the procedure is very reliable in real-time.