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POTENTIAL GROSS DOMESTIC PRODUCT (GDP)

Statistics Directorate    
Definition:
Potential gross domestic product (GDP) is defined in the OECD’s Economic Outlook publication as the level of output that an economy can produce at a constant inflation rate. Although an economy can temporarily produce more than its potential level of output, that comes at the cost of rising inflation. Potential output depends on the capital stock, the potential labour force (which depends on demographic factors and on participation rates), the non-accelerating inflation rate of unemployment (NAIRU), and the level of labour efficiency.

Source Publication:
The OECD Economic Outlook: Sources and Methods.

Hyperlink:
http://www.oecd.org/eco/outlook/sources-and-methods.htm

Statistical Theme: National accounts

Created on Tuesday, September 25, 2001

Last updated on Friday, March 28, 2014