Output Gap Measures

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Are we at full employment? Here are some estimates:

Figure 1: Output gap, from CBO (blue), from OECD (tan), from IMF (green), from Fleischman/Roberts-FRB (red), all in % of potential GDP. NBER defined recession dates shaded gray. Source: CBO February 2024, OECD November 2023, IMF October 2023, Atlanta Fed Taylor rule utility February 2024, NBER.

Higher frequency estimates are available for the CBO and one version of the FRB gap series:

Figure 2: Output gap, from CBO (blue), from Fleischman/Roberts-FRB (red), both in % of potential GDP. NBER defined peak-to-trough recession dates shaded gray. Source: CBO February 2024, Atlanta Fed Taylor rule utility February 2024, NBER.

Interestingly, post-pandemic this particular FRB measure has been consistently higher than the CBO measure — until 2023Q4. (Note that the members of the FOMC are not all going to rely on this specific measure.)


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