Okun Gap

Dictionary Says

Definition of 'Okun Gap'

A macroeconomic term that describes the situation when an economy's potential gross domestic product (GDP) differs from its actual gross domestic product. The gap can either be recessionary or inflationary, but will depend on the economy's current state, including levels of inflation and the unemployment rate.
Investopedia Says

Investopedia explains 'Okun Gap'

An Okun gap can be expressed in either percentage or absolute terms and will be a measure of how much output, as measured by GDP, the economy produced in a given time period relative to the economy's full-employment level.

Arthur Okun, who is the person credited with discovering Okun's law, among other famous discoveries, was a senior economist at the Counsel of Economic Advisers (CEA) during President Kennedy's term in office and a professor at Yale University.

Sign Up For Term of the Day!

Try Our Stock Simulator!

Test your trading skills!

Related Definitions

  1. Okun's Law

    The relationship ...
  2. GDP Gap

    The forfeited ...
  3. Inflation

    The rate at ...
  4. Gross Domestic Product - GDP

    The monetary ...
  5. Full Employment

    A situation in ...
  6. Recessionary Gap

    A term routed in ...
  7. Inflationary Gap

    A macroeconomic ...
  8. Council of Economic Advisors - CEA

    A panel of three ...
  9. Lehman Brothers

    A firm that was ...
  10. Insolvency

    When an ...

Articles Of Interest

  1. The Importance Of Inflation And GDP

    Learn the underlying theories behind these concepts and what they can mean for your portfolio.
  2. Explaining The World Through Macroeconomic Analysis

    From unemployment and inflation to government policy, learn what macroeconomics measures and how it affects everyone.
  3. Economic Indicators For The Do-It-Yourself Investor

    These tools put the market in your hands.
  4. What is GDP and why is it so important?

  5. A History Of Wall Street Profitability

    Learn about the performance of the Dow Jones Industrial Averages (DJIA) through the decades.
  6. An Introduction To Behavioral Finance

    Curious about how emotions and biases affect the market? Find some useful insight here.
  7. 5 Things You Shouldn't Do During A Recession

    These tips can help you avoid financial risk, and are especially important during an economic slowdown.
  8. The Baltic Dry Index: Evaluating An Economic Recovery

    This index can provide insight into economic growth and production, but it has its critics.
  9. 4 ETF Strategies For A Down Market

    If the market's got you feeling low, these investments could pick you up.
  10. Disclaiming Inherited Plan Assets

    There are some good reasons for choosing not to accept the funds, but be sure you follow the proper process.

comments powered by Disqus
Recommended
Loading, please wait...
Trading Center