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GDP Gap

Definition

The GDP gap or the output gap is the difference between actual GDP or actual output and potential GDP. The calculation for the output gap is Y–Y where Y is actual output and Y* is potential output. If this calculation yields a positive number it is called an inflationary gap and indicates the growth of aggregate demand is outpacing the growth of aggregate supply—possibly creating inflation; if the calculation yields a negative number it is called a recessionary gap—possibly signifying deflation.

What is 'GDP Gap'

The forfeited output of a country's economy resulting from the failure to create sufficient jobs for all those willing to work.

Explaining 'GDP Gap'

A GDP gap denotes the amount of production that is irretrievably lost. The potential for higher production levels is wasted because there aren't enough jobs supplied.


Further Reading


The credit-to-GDP gap and countercyclical capital buffers: questions and answers
papers.ssrn.com [PDF]
… Its applications to economics are more recent (eg Cohen et al (2009), Berge and Jorda (2011), Jorda et … 2013) shows that the credit gaps based on total credit outperform the credit gaps based on … left-hand panel of Graph 3 shows the performance of the credit-to-GDP gap as an …

The credit‐to‐GDP gap and complementary indicators for macroprudential policy: Evidence from the UKThe credit‐to‐GDP gap and complementary indicators for macroprudential policy: Evidence from the UK
onlinelibrary.wiley.com [PDF]
… Its applications to economics are more recent (eg Cohen et al (2009), Berge and Jorda (2011), Jorda et … 2013) shows that the credit gaps based on total credit outperform the credit gaps based on … left-hand panel of Graph 3 shows the performance of the credit-to-GDP gap as an …

Countercyclical capital buffers and credit-to-GDP gaps: Simulation for Central, Eastern, and Southeastern EuropeCountercyclical capital buffers and credit-to-GDP gaps: Simulation for Central, Eastern, and Southeastern Europe
www.tandfonline.com [PDF]
… Its applications to economics are more recent (eg Cohen et al (2009), Berge and Jorda (2011), Jorda et … 2013) shows that the credit gaps based on total credit outperform the credit gaps based on … left-hand panel of Graph 3 shows the performance of the credit-to-GDP gap as an …

Japan's potential output and the GDP gap: a new estimateJapan's potential output and the GDP gap: a new estimate
www.sciencedirect.com [PDF]
… Its applications to economics are more recent (eg Cohen et al (2009), Berge and Jorda (2011), Jorda et … 2013) shows that the credit gaps based on total credit outperform the credit gaps based on … left-hand panel of Graph 3 shows the performance of the credit-to-GDP gap as an …

Credit-to-GDP Trends and Gaps by Lender-and Credit-typeCredit-to-GDP Trends and Gaps by Lender-and Credit-type
ideas.repec.org [PDF]
… Its applications to economics are more recent (eg Cohen et al (2009), Berge and Jorda (2011), Jorda et … 2013) shows that the credit gaps based on total credit outperform the credit gaps based on … left-hand panel of Graph 3 shows the performance of the credit-to-GDP gap as an …

On the long-run calibration of the credit-to-GDP gap as a banking crisis predictorOn the long-run calibration of the credit-to-GDP gap as a banking crisis predictor
papers.ssrn.com [PDF]
… Its applications to economics are more recent (eg Cohen et al (2009), Berge and Jorda (2011), Jorda et … 2013) shows that the credit gaps based on total credit outperform the credit gaps based on … left-hand panel of Graph 3 shows the performance of the credit-to-GDP gap as an …

Countercyclical capital buffers and real-time credit to GDP gap estimates: a South African perspectiveCountercyclical capital buffers and real-time credit to GDP gap estimates: a South African perspective
www.ingentaconnect.com [PDF]
… Its applications to economics are more recent (eg Cohen et al (2009), Berge and Jorda (2011), Jorda et … 2013) shows that the credit gaps based on total credit outperform the credit gaps based on … left-hand panel of Graph 3 shows the performance of the credit-to-GDP gap as an …

Countercyclical capital buffers: credit-to-GDP ratio versus credit growthCountercyclical capital buffers: credit-to-GDP ratio versus credit growth
www.tandfonline.com [PDF]
… Its applications to economics are more recent (eg Cohen et al (2009), Berge and Jorda (2011), Jorda et … 2013) shows that the credit gaps based on total credit outperform the credit gaps based on … left-hand panel of Graph 3 shows the performance of the credit-to-GDP gap as an …

The Asymmetric Reaction of Monetary Policy to Inflation and Real GDP in China <span style=[J]' src='/thumbnails/?img=http%3A%2F%2Fen.cnki.com.cn%2FArticle_en%2FCJFDTotal-JJYJ200909004.htm' />The Asymmetric Reaction of Monetary Policy to Inflation and Real GDP in China [J]
en.cnki.com.cn [[J]' href='https:/api.miniature.io/pdf?url=en.cnki.com.cn%2FArticle_en%2FCJFDTotal-JJYJ200909004.htm'>PDF]
… Its applications to economics are more recent (eg Cohen et al (2009), Berge and Jorda (2011), Jorda et … 2013) shows that the credit gaps based on total credit outperform the credit gaps based on … left-hand panel of Graph 3 shows the performance of the credit-to-GDP gap as an …


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