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Because of the diversity of potential outputs from the LTS data, we evaluated algorithm performance against summary metrics for disturbance, recovery, and stability, both for capture of events and longer-duration processes.
The study protocols described in the manuscript represent an effort to inform the scientific community of potential outputs from a major national project, while adding transparency and accessibility to the methods that have been conceptualised to fulfil each project objective.
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Finally, Mr Borio recommends revising the woolly concept of "potential" output.
There is downward pressure on prices all the time that actual output falls short of potential output, and the size of this output gap is growing.
An output gap is based on educated guess work, given the level of potential output is never actually observed but has to be estimated.
Then they develop a model of potential output that yields an output gap, and from that infer the natural rate.
Because the growth of potential output has slowed in major economies since the crisis, future trend growth may be weaker than anticipated".
Estimates suggest a peak reduction throughout the euro area "of about 3 percent in the level of potential output".
These "fundamental determinants of the growth of potential output do not seem to have deteriorated at all," he said.
And this is important: those pessimistic assessments of potential output play an important role in the UK austerity frenzy.
If that drop is permanent, it would alone entail a significant decline in the level of potential output.
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Justyna Jupowicz-Kozak
CEO of Professional Science Editing for Scientists @ prosciediting.com