Figure B
Lagging demand is holding back economic growth: Ratio of actual to potential GDP, 1995–2016
| Date | Output gap | Actual and potential GDP are equal |
|---|---|---|
| 1995Q1 | 0.977097% | 1% |
| 1995Q2 | 0.973481 | 1 |
| 1995Q3 | 0.97466 | 1 |
| 1995Q4 | 0.974352 | 1 |
| 1996Q1 | 0.97351 | 1 |
| 1996Q2 | 0.982895 | 1 |
| 1996Q3 | 0.984196 | 1 |
| 1996Q4 | 0.986468 | 1 |
| 1997Q1 | 0.985363 | 1 |
| 1997Q2 | 0.991033 | 1 |
| 1997Q3 | 0.994141 | 1 |
| 1997Q4 | 0.992155 | 1 |
| 1998Q1 | 0.992044 | 1 |
| 1998Q2 | 0.991505 | 1 |
| 1998Q3 | 0.99416 | 1 |
| 1998Q4 | 1.000036 | 1 |
| 1999Q1 | 0.997827 | 1 |
| 1999Q2 | 0.995959 | 1 |
| 1999Q3 | 0.998422 | 1 |
| 1999Q4 | 1.005654 | 1 |
| 2000Q1 | 0.998923 | 1 |
| 2000Q2 | 1.00783 | 1 |
| 2000Q3 | 0.999553 | 1 |
| 2000Q4 | 0.995967 | 1 |
| 2001Q1 | 0.984363 | 1 |
| 2001Q2 | 0.981188 | 1 |
| 2001Q3 | 0.970231 | 1 |
| 2001Q4 | 0.965416 | 1 |
| 2002Q1 | 0.967249 | 1 |
| 2002Q2 | 0.965966 | 1 |
| 2002Q3 | 0.964341 | 1 |
| 2002Q4 | 0.958892 | 1 |
| 2003Q1 | 0.957809 | 1 |
| 2003Q2 | 0.960716 | 1 |
| 2003Q3 | 0.97076 | 1 |
| 2003Q4 | 0.976107 | 1 |
| 2004Q1 | 0.97571 | 1 |
| 2004Q2 | 0.976673 | 1 |
| 2004Q3 | 0.979341 | 1 |
| 2004Q4 | 0.981633 | 1 |
| 2005Q1 | 0.98591 | 1 |
| 2005Q2 | 0.985075 | 1 |
| 2005Q3 | 0.987495 | 1 |
| 2005Q4 | 0.987516 | 1 |
| 2006Q1 | 0.994037 | 1 |
| 2006Q2 | 0.992109 | 1 |
| 2006Q3 | 0.988332 | 1 |
| 2006Q4 | 0.991479 | 1 |
| 2007Q1 | 0.987713 | 1 |
| 2007Q2 | 0.990828 | 1 |
| 2007Q3 | 0.993133 | 1 |
| 2007Q4 | 0.992421 | 1 |
| 2008Q1 | 0.98154 | 1 |
| 2008Q2 | 0.982149 | 1 |
| 2008Q3 | 0.973463 | 1 |
| 2008Q4 | 0.949394 | 1 |
| 2009Q1 | 0.933047 | 1 |
| 2009Q2 | 0.928985 | 1 |
| 2009Q3 | 0.929432 | 1 |
| 2009Q4 | 0.935965 | 1 |
| 2010Q1 | 0.937864 | 1 |
| 2010Q2 | 0.944765 | 1 |
| 2010Q3 | 0.949017 | 1 |
| 2010Q4 | 0.952779 | 1 |
| 2011Q1 | 0.946651 | 1 |
| 2011Q2 | 0.950835 | 1 |
| 2011Q3 | 0.950052 | 1 |
| 2011Q4 | 0.957724 | 1 |
| 2012Q1 | 0.960962 | 1 |
| 2012Q2 | 0.962196 | 1 |
| 2012Q3 | 0.960011 | 1 |
| 2012Q4 | 0.956805 | 1 |
| 2013Q1 | 0.959872 | 1 |
| 2013Q2 | 0.958077 | 1 |
| 2013Q3 | 0.961676 | 1 |
| 2013Q4 | 0.967167 | 1 |
| 2014Q1 | 0.96119 | 1 |
| 2014Q2 | 0.968049 | 1 |
| 2014Q3 | 0.976319 | 1 |
| 2014Q4 | 0.977145 | 1 |
| 2015Q1 | 0.980831 | 1 |
| 2015Q2 | 0.983327 | 1 |
| 2015Q3 | 0.983191 | 1 |
| 2015Q4 | 0.980332 | 1 |
| 2016Q1 | 0.977782 | 1 |
| 2016Q2 | 0.979279 | 1 |
| 2016Q3 | 0.982089 | 1 |
| 2016Q4 | 0.982508 | 1 |
| 2017Q1 | 0.9817 | 1 |
| 2017Q2 | 0.985229% | 1% |
Note: Potential GDP is adjusted to make 1999 a year with no output gap (a ratio of 1 on this chart). This adjustment is based on a low and non-accelerating rate of inflation in that year. Shaded areas denote recessions.
Source: Author’s analysis of data from CBO (2017)
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