GDP Gap


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GDP Gap

The economic growth that an economy would experience if all persons willing to work had jobs. The GDP gap represents growth that can never happen because the economy has not allocated jobs to all willing workers. This can occur for a number of reasons, including excessive government regulation and corporate fear for future earnings. See also: Unemployment rate, Full employment.
References in periodicals archive ?
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.
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.
GDP gap 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.