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Actual vs Potential Output Gap Calculator

Express the difference between actual and potential GDP as a percentage.

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Calculator inputs

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How to use this calculator

  1. Enter the known values in the units shown. Results update as you type.
  2. Edit a calculated value to solve backwards, or lock a value to hold it fixed.
  3. Use the worked example to check the method. Reset restores the starting fields.

Use the result with context

Results are estimates for planning and education. Confirm rates, taxes, fees, and legal requirements with the relevant institution or a qualified professional before making a financial decision.

Formula and method

Subtract potential GDP from actual GDP, then divide by potential GDP. Actual output of 900 against potential output of 1,000 gives a negative 10% output gap.

Output gap (%) = (actual GDP − potential GDP) ÷ potential GDP × 100

Worked example

Enter these known values and leave the other values blank.

Actual GDP (Y)
900 USD · billion
Potential GDP (Y*)
1000 USD · billion
GDP gap (Ỹ)
-10 %

Assumptions and limitations

  • Use values from a consistent period, scope and currency. The stated formula defines this simplified model; the explanation describes quantities it leaves out.

Common questions

Is potential GDP directly observed?

Potential output is estimated using an economic model. The gap therefore depends on that estimate as well as the observed output data.

References

The calculation equations, inverse formulas, units, and input rules were imported from this source. Bookify provides the interface and equation solver.

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