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Using a binary reference series based on the dating procedure of Artis, Kontolemis and Osborn (1997) different procedures for predicting turning points of the German business cycles were tested. Specifically, a probit model as proposed by Estrella and Mishkin (1997) as well as Markov-switching models were taken into consideration. The overall results(More)
Opinions expressed in this paper are those of the author and do not necessarily reflect views of the Institute. Abstract: Using a binary reference series based on the dating procedure of Artis, Kontolemis and Osborn (1997) different procedures for predicting turning points of the German business cycles were tested. Specifically, a probit model as proposed(More)
Potential Output or the Output Gap plays a prominent role in inflation targeting frameworks of monetary policy as well as in the monetary targeting approach. Both monetary policy strategies will adversely affect the real economy if the estimate of potential output is wrong. Furthermore the question of whether policymakers correctly estimate potential output(More)
Over the past 20 years, macroeconomists have incorporated more and more results from behavioral economics into their models. We argue that doing so has helped fixed deficiencies with standard approaches to modeling the economy—for example, the counterfactual absence of inertia in the standard New Keynesian model of economic fluctuations. We survey efforts(More)