Output gap
The distance between actual and potential output: positive means the economy is running above its sustainable level, negative means slack.
How to read the number
Central banks phrase rate decisions in exactly these terms — a positive gap argues for tightening, a negative one for easing.
When the metric lies
Both halves get revised, the fact and the potential alike, so the sign of the gap is known far less reliably in real time than a year afterwards.
Also known as: gdp gap