The difference between actual GDP growth and the trend rate of GDP growth for an economy. The gap can be positive or negative.
Below is a set of diagrams to show how a positive and negative output gap emerges in an economy in a AD-AS framework.
The difference between actual GDP growth and the trend rate of GDP growth for an economy. The gap can be positive or negative.
Below is a set of diagrams to show how a positive and negative output gap emerges in an economy in a AD-AS framework.