Calculation of output gap

Authors Danielsen, Troels Kromand; Jørgensen, Casper Winther Nguyen
Subject Danish Economy; Models; Economic activity and employment
Type Monetary Review  
Year 2015
Published 30 December 2015
Link to publication Monetary Review, 4th Quarter 2015
The output gap measures how far Danish output (measured by the gross domestic product, GDP) is from its structural level, corresponding to normal capacity utilisation in the economy. It is regarded as an overall indicator of the current cyclical position and therefore plays a prominent role in the planning of economic policy. For this reason, the output gap should be available as early as possible, but at the same time be calculated as accurately and reliably as possible.