The typical measure of the opportunity costs of idle resources is the GDP gap
Regarding monetary policy, a negative relation is observed between nominal interest rate and GDP gap
, which shows that the monetary authorities adopt pro-cyclical stance due to presence of weak institutions [Duncan (2012)].
The residual capacity of the investments is devoted to capital growth and is defined as a capital niche similarly to that one can define it (relative value) as a GDP gap
The path of the GDP gap
was roughly symmetrical around the trough of the recession and looked V-shaped: It first decreased and then rapidly returned to zero, with the recovery phase lasting approximately as long as the recession phase.
b) The GDP gap
is defined as (actual - potential)/potential.
To estimate the GDP gap
we use the Hodrick-Prescott (HP) filter with a smoothing parameter of 1,600 starting in 1995 to estimate potential GDP.
In this regard, it is interesting that Bill Poole's (2006) recent analysis of the Fed's policy rule could not go beyond 2001, because the data on the GDP gap
were not released beyond that date.
In "Bridging the Texas GDP Gap
," director of energy economics and microeconomic analysis Stephen P.
We do not need to know the GDP gap
, the unemployment gap, or the neutral real interest rate, to keep the price level near constancy.
is measured as the percentage difference between actual and potential output.
In this article, we use two alternative measures of excess demand: the GDP gap
and the unemployment gap.
But WEF's chief economist, Dr Augusto Lopez-Carlos, warns instead that the GDP gap
with the US is widening.