Output gap: analysis of GDP and its activities for Brazil (1980-2019)

Abstract

This study analyses the evolution of the output gap of Brazilian GDP and its ‘Industry’ and ‘Services’ activities for the period from 1980 to 2019. This breakdown is unprecedented and enriches analysis, enabling the formulation of economic policies focused on these specific sectors. The following methods were used: Production Function, linear, quadratic, and exponential trend extraction, moving averages of 4 to 8 quarters, and the Hodrick-Prescott (HP) filter. Use of the Production Function also enabled identification of the evolution of Total Factor Productivity (TFP) of output and the activities mentioned. Besides the results for Brazil, all calculation methodologies developed for this approach are also presented.