During economic downturns an economy’s output of goods and services declines. When times are good, by contrast, that output—usually measured as GDP—increases (see “Gross Domestic Product: An Economy’s ...

Christina Majaski writes and edits finance, credit cards, and travel content. She has 14+ years of experience with print and digital publications. Vikki Velasquez is a researcher and writer who has ...

During economic downturns an economy’s output of goods and services declines. When times are good, by contrast, that output—usually measured as GDP—increases (see “Gross Domestic Product: An Economy’s ...

The GDP framework and the output gap are an abstraction that does little more than provide justification for the interventions of government officials. According to popular thinking, the key cause ...

The output gap measures how far the economy is from its full employment or “potential” level that depends on supply-side factors of the economy: the supply of workers and their productivity. During a ...