Program GAP Technical Description and User manual
Version 5.0
GAP implements the EU's Commonly Agreed Methodology (CAM) to estimate the output gap, i.e. the deviation of GDP from its potential, which is one key variable in the fiscal surveillance process emanating from the Stability and Growth Pact. Since 2002 the CAM applies a production function approach to derive the output gap from the cyclical deviations of labour and total factor productivity from their potential. The cycle in unemployment is handled as an unobserved dynamic factor which is common to a labour cost indicator in a Phillips curve relationship, while the cycle in productivity is linked to the degree of capacity utilization in the economy. GAP implements such bivariate dynamic factor models to decompose unemployment and productivity into equilibrium or potential plus cyclical fluctuations.
https://ec.europa.eu/jrc/en/macro-econometric-statistical-software/gap
PLANAS Christophe;
ROSSI Alessandro;
2020-07-06
Publications Office of the European Union
JRC121236
978-92-76-20364-3 (online),
OP KJ-04-20-384-EN-N (online),
https://publications.jrc.ec.europa.eu/repository/handle/JRC121236,
10.2760/896629 (online),
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