Financial variables improve output gap estimates, BoE paper finds

Measure gives policy-makers better early-warning indicators

The Bank of England
The Bank of England

Policy-makers may be able to spot imbalances developing more easily if they augment their estimates of the output gap with financial variables, according to a working paper published on February 12 by the Bank of England (BoE).

Most economists famously failed to see the 2008 crisis coming, which authors Marko Melolinna and Máté Tóth suggest may be in part because of the focus on macroeconomic variables, which looked relatively normal in the run-up to the crisis, to the neglect of financial

Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.

To access these options, along with all other subscription benefits, please contact or view our subscription options here:

You are currently unable to copy this content. Please contact to find out more.

Sorry, our subscription options are not loading right now

Please try again later. Get in touch with our customer services team if this issue persists.

New to Central Banking? View our subscription options

Register for Central Banking

All fields are mandatory unless otherwise highlighted

This address will be used to create your account

You need to sign in to use this feature. If you don’t have a Central Banking account, please register for a trial.

Sign in
You are currently on corporate access.

To use this feature you will need an individual account. If you have one already please sign in.

Sign in.

Alternatively you can request an individual account