Production potential (productive capacity)

If not defined otherwise, the available supply possibilities of an economy. In other words: the macroeconomic production potential, which – given the endowment with natural resources – is determined by – the available production factors labor, capital, – the state of technical knowledge, and – the regulatory and growth policies of the state. – See potential labor force, utilization rate, female labor ratio, infrastructure, capacity utilization, potential growth, output gap, Say’s law, underutilization, processing volume, volatility. – Cf. ECB Monthly Bulletin of July 2009, pp. 48 et seq. (difficulties in calculating potential output in the euro area; implications for monetary policy; overviews), Deutsche Bundesbank Monthly Bulletin of October 2009, pp. 18 et seq. (potential output and government infrastructure investment), Deutsche Bundesbank Monthly Bulletin of December 2009, pp. 26 et seq. (potential output in Germany suffers “potential damage” of at least two percent by 2011 in view of the financial crisis; overview), ECB Monthly Bulletin of January 2011, pp. 79 ff. (detailed, textbook presentation; many overviews and comparisons; references), ECB Monthly Bulletin of November 2013, pp. 89 ff. (definitional and coverage problems; in-depth analysis of developments since 2000; overviews; references), ECB Monthly Bulletin of April 2014, pp. 52 ff. (fundamental and a

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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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