Potential growth

The growth in gross domestic product in a given year in the event of full utilization of existing production capacities. – Potential growth thus indicates the extent to which an economy can grow without inflation in the long term, i.e. in cyclically adjusted terms. It is thus an important measure for determining the actual utilization of production capacities. Its calculation raises many problems in detail. Potential growth is monitored by the ECB within the framework of the two-pillar principle. – See capacity utilization, potential output, output gap, stability policy. – Cf. Deutsche Bundesbank Monthly Report of April 2012, pp. 13 et seq. (projection of potential growth in the German economy; many overviews; references; p. 28: important conclusions).

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University Professor Dr. Gerhard Merk, Dipl.rer.pol., Dipl.rer.oec.
Professor Dr. Eckehard Krah, Dipl.rer.pol.
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