Aggregate demand gap based on a simple structural VAR model

This paper presents aggregate demand gaps for seven OECD countries using structural VAR estimation. These estimates are far more robust than HP-filtered series-typical estimates for GDP-gaps-and demonstrate that both aggregate demand and supply shocks were important in the recent global financial crisis.

► This paper presents aggregate demand gaps for seven OECD countries using SVAR. ► The estimates are far more robust than HP-filtered series for GDP-gaps. ► This is particularly so at end-points that policy-makers in real time are concerned about. ► Also shown is that both demand and supply shocks were important in the recent crisis.