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 ?
Once again, however, the stable sample means obscure considerable annual volatility in the GDP gaps and the various contributing factors.
Equation (12) can then be rearranged as in (3) to give a decomposition of the GDP gap.
Hence, we use the method proposed in section 2, and the formula in equation (12), to decompose the GDP gap into various contributing factors.
Column 5 contains annual estimates of the contribution to the nominal (and real) GDP gap of deviations of total-factor productivity [R.
For example, the real GDP gap for 1986 indicates that real output was above its long-run trend.
1992 and 1993), the negative GDP gap was driven by deviations of total-factor productivity and employment from their long-run trends.