I am not a fan of “output gaps”, this measure of how much are resources in the economy employed. But central banks all over the world use it and thus we have to at least mention it.In theory an output gap shows how far is the economy from its potential. A positive gap means that current GDP is above its long term potential while a negative one shows that the opposite.Here is how central banks use this measure.
To reach its potential Romania needs to “relax” « FlorinCitu
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To reach its potential Romania needs to “relax” « FlorinCitu