AN ALTERNATIVE APPROACH TO MEASURING OUTPUT GAP
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This paper tries to identify the inflationary pressures in the Slovak economy by two methods. The first method uses concept of output gap considered as a main determinant of the inflation dynamics. The traditional output gap is estimated by the structural vector autoregressive (SVAR) technique. An emphasis of the paper is however placed on a new way of looking at the inflation dynamics. The second method, based on this framework, uses the real unit labor cost in order to identify inflationary pressures in the Slovak economy.
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