Output Gaps. Some evidence from the UK, France and Germany

Abstract
As the UK economy recovers from the recent recession, there is again widespread concern at the re-emergence of the spectre of inflation. Recent increases in base rates were primarily aimed at reassuring markets that inflation will be controlled. It is therefore of use to be able to calculate whether or not inflationary pressures are liable to re-emerge in the near future. Our macroeconomic, model based, forecast on page 8 of this Review is one way that this could be done. This note investigates a number of other approaches.

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