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Estimates of potential output are an important component of a structured forecasting and policy analysis system. Using information on capacity utilization, this paper extends the multivariate filter developed by Laxton and Tetlow (1992) and modified by Benes and others (2010), Blagrave and others (2015), and Alichi and others (2015). We show that, although still fairly uncertain, the real-time estimates from this approach are more accurate than estimates constructed from naïve univariate statistical filters. The paper presents illustrative estimates for the United States and discusses how the end-of-sample estimates can be improved with additional information.

Macroeconomics. --- Macroeconomic policy making. --- Macroeconomics --- Economics --- Econometric models. --- Mathematical models. --- Inflation --- Production and Operations Management --- Model Construction and Estimation --- Price Level --- Deflation --- Monetary Policy --- Macroeconomics: Production --- Financial Crises --- Economic & financial crises & disasters --- Potential output --- Output gap --- Capacity utilization --- Global financial crisis of 2008-2009 --- Production --- Prices --- Financial crises --- Economic theory --- Industrial capacity --- Global Financial Crisis, 2008-2009 --- United States

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This paper discusses key findings of the Second Review for Burundi under the three-year arrangement under the Poverty Reduction and Growth Facility (PRGF). All quantitative and structural performance criteria for March 2009 were met, and structural reforms are on track. In the near term, the authorities are determined to focus on sustaining macroeconomic stability, increasing domestic resource mobilization, promoting pro-poor growth, and implementing the power-sharing agreement to consolidate the peace process. Their commitment to the PRGF-supported program is unwavering and their end-March 2009 program performance has been impressive.

Banks and Banking --- Macroeconomics --- Public Finance --- Demography --- Fiscal Policy --- Financial Crises --- Health: General --- Banks --- Depository Institutions --- Micro Finance Institutions --- Mortgages --- Demographic Economics: General --- Education: General --- Economic & financial crises & disasters --- Public finance & taxation --- Health economics --- Banking --- Population & demography --- Fiscal policy --- Global financial crisis of 2008-2009 --- Health --- Population and demographics --- Financial crises --- Education --- Global Financial Crisis, 2008-2009 --- Banks and banking --- Population --- Burundi

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Do euro area inflation expectations remain well-anchored? This paper finds that the protracted period of low (and below-target) inflation in the euro area since 2013 has weakened their anchoring. Testing their sensitivity to inflation and macroeconomic news, this paper expands existing results in two key dimensions. First, by analyzing all available (advanced) inflation releases. Second, the reactions of expectations are investigated at daily, time-varying and intraday frequency regressions to add robustness to our conclusions. Results point to a significant impact of inflation news over recent years that had not been observed before in the euro area.

Monetary policy --- Inflation. --- Monetary management --- Economic policy --- Currency boards --- Money supply --- Inflation --- Investments: General --- Macroeconomics --- Price Level --- Deflation --- Monetary Policy --- Central Banks and Their Policies --- Investment --- Capital --- Intangible Capital --- Capacity --- Financial Crises --- Economic & financial crises & disasters --- Return on investment --- Global financial crisis of 2008-2009 --- Prices --- National accounts --- Financial crises --- Saving and investment --- Global Financial Crisis, 2008-2009 --- Germany

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This paper reviews the relationship between real GDP growth and domestic bank lending to the private sector in Croatia after the 2008 global financial crisis (GFC), drawing on a cross-country analysis of European countries. Croatia’s recession was substantially longer compared to peers due to both domestic and external factors. Bank credit to the private sector was found to be important for economic growth, but less than often perceived, especially during a boom–bust cycle. Using empirical analysis, this paper confirms that the deleveraging of the private sector, particularly nonfinancial companies, was slow and contributed to Croatia’s prolonged recession. When provisions of nonperforming loans (NPLs) improved and the uncertainty following the GFC receded, credit supply increased, while demand for credit hesitantly picked up with the strengthening of the recovery. The paper thus reinforces that NPLs and how they are handled as well as real growth are important determinants for credit. These findings are supported by the cross-country analysis and corroborated by other studies.

Financial Risk Management --- Macroeconomics --- Money and Monetary Policy --- Industries: Financial Services --- Monetary Policy, Central Banking, and the Supply of Money and Credit: General --- Financial Crises --- Banks --- Depository Institutions --- Micro Finance Institutions --- Mortgages --- Monetary economics --- Economic & financial crises & disasters --- Finance --- Bank credit --- Credit --- Financial crises --- Nonperforming loans --- Global financial crisis of 2008-2009 --- Money --- Financial institutions --- Loans --- Global Financial Crisis, 2008-2009 --- Croatia, Republic of

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In this paper we propose a novel approach to obtain the predictive density of global GDP growth. It hinges upon a bottom-up probabilistic model that estimates and combines single countries’ predictive GDP growth densities, taking into account cross-country interdependencies. Speci?cally, we model non-parametrically the contemporaneous interdependencies across the United States, the euro area, and China via a conditional kernel density estimation of a joint distribution. Then, we characterize the potential ampli?cation e?ects stemming from other large economies in each region—also with kernel density estimations—and the reaction of all other economies with para-metric assumptions. Importantly, each economy’s predictive density also depends on a set of observable country-speci?c factors. Finally, the use of sampling techniques allows us to aggregate individual countries’ densities into a world aggregate while preserving the non-i.i.d. nature of the global GDP growth distribution. Out-of-sample metrics con?rm the accuracy of our approach.

Macroeconomics --- Personal Finance -Taxation --- Hypothesis Testing --- General Aggregative Models: Forecasting and Simulation --- Prices, Business Fluctuations, and Cycles: Forecasting and Simulation --- Financial Crises --- Personal Income and Other Nonbusiness Taxes and Subsidies --- Economic & financial crises & disasters --- Public finance & taxation --- Global financial crisis of 2008-2009 --- Personal income tax --- Financial crises --- Taxes --- Global Financial Crisis, 2008-2009 --- Income tax --- United States