output gap

USAGE SUMMARY

The phrase "output gap" is correct and usable in written English.
It is used to refer to the difference between the actual output and the maximum output of an economy over a given period of time. For example, "The significant reduction in output gap in the last quarter suggests that the economy is recovering."

✓ Grammatically correct

News & Media

Science

Formal & Business

Human-verified examples from authoritative sources

Exact Expressions

57 human-written examples

Output gap.

The Economist

This "output gap" translates into rising unemployment and accelerating deflation.

The New York Times

Their second responsibility is to help close the output gap.

The Guardian - Business

Posen diagnosed the problem as a large output gap.

The New York Times - Magazine

This boosts investment and discourages saving, reducing the output gap.

The Economist

The inflation outlook is not entirely driven by the level of the output gap".

The Guardian - Business

The output gap is a judgment of the spare capacity in an economy.

The Guardian

The BoE's Monetary Policy Committee is split over the size of the UK output gap.

The Guardian - Business

This is a crucial measure – a narrowing output gap means the economy has improved.

The Guardian

This "output gap" was bound to show up in higher unemployment.

The New York Times

The real story is modest underlying growth but not high enough to reduce the output gap.

The Guardian - Business

Expert writing Tips

Best practice

When discussing fiscal policy, specify whether the "output gap" is positive or negative to clarify if the economy is operating above or below its potential.

Common error

Avoid attributing an entire budget deficit to the "output gap". Recognize that some portion might be structural, reflecting underlying imbalances not related to the business cycle.

Linguistic Context

The phrase "output gap" functions as a noun phrase that represents an economic concept. As illustrated by Ludwig, it describes the difference between actual and potential economic output. Ludwig AI confirms its proper usage in various contexts.

Expression frequency: Very common

Frequent in

News & Media

45%

Science

30%

Formal & Business

15%

Less common in

Encyclopedias

5%

Wiki

3%

Reference

2%

Ludwig's WRAP-UP

The term "output gap" is a frequently used noun phrase in economics, referring to the difference between an economy's actual and potential GDP. Ludwig examples show it is used to assess economic performance and guide policy decisions. The analysis, verified by Ludwig AI, indicates correct grammatical usage across various sources, mainly within news, scientific, and business contexts. Related phrases offer alternative ways to express similar concepts. Remember to consider both cyclical and structural factors when analyzing the "output gap", avoiding oversimplification of complex economic realities.

More alternative expressions

Phrases that express similar concepts, ordered by semantic similarity:

difference between actual and potential GDP

Directly defines the gap in terms of Gross Domestic Product.

gap between potential and realized production

Emphasizes the difference between what could be produced and what is actually produced.

potential output shortfall

Focuses on the deficiency in production compared to what could be achieved.

production deficit

Highlights the shortfall in the amount of goods and services produced.

economic slack

Highlights the underutilization of resources in the economy.

spare capacity in the economy

Emphasizes the unused productive potential within the economic system.

underperforming economy

Describes the state of an economy that is not reaching its full capacity.

unutilized capacity

Refers to the portion of production capacity that is not being used.

idle resources

Focuses on the underemployment of resources like labor and capital.

economic inefficiency

Points out the inefficient use of economic resources.

FAQs

How is the "output gap" measured?

The "output gap" is typically measured as the difference between an economy's actual Gross Domestic Product (GDP) and its potential GDP. Potential GDP is an estimate of what the economy could produce at full employment.

What does a positive "output gap" indicate?

A positive "output gap" means that actual output is exceeding potential output, which can lead to inflation as demand outstrips supply.

What does a negative "output gap" imply for the economy?

A negative "output gap" indicates that the economy is operating below its potential, leading to unemployment and deflationary pressures. Stimulating demand can help close a negative /s/negative+output+gap.

Are there alternative terms for "output gap"?

Yes, related concepts include "economic slack", "spare capacity", and the "difference between actual and potential GDP". All these terms point towards the underutilization of the economy's potential.