Hodrick Prescott Filter -- Part 3: Output gap for Taylor rule

HP Filter in Excel
Solver minimises the loss function of HP filter
Key words:
Output gap
Taylor rate
Taylor rule

[@tinaparate5400]

1. If I want to run model without log, but to find output gap I am using log, then I will get output gap in log. How to get with log output gap? 2. Also my variables are in rates, so I don't want to convert to %.

[@vitamincpluszink7717]

Does the time series has to be seasonal adjusted or not ?

[@geostadt578]

Yes, seasonal adjusted would be good,

[@vitamincpluszink7717]

@@geostadt578 thx

[@fardilajv8299]

if i want to measure the output gap, should the value of log GDP transform to %?

[@geostadt578]

Yes. The Dimension has to be the same for example 3% inflation gap or 2% output gap... The Dimension has to be the same

[@fardilajv8299]

If i want to calculate the inflation gap, should the value of inflation be logged or not. Thanks

[@geostadt578]

No log. Because the inflation is already a rate of change and measured in the same dimension as the output gap..