Production Gap

AAA

DEFINITION of 'Production Gap'

An economic analytical term denoting the degree of relative deviation of actual industrial production from its perceived potential production. The production gap is a measure of how short domestic industrial production is from its potential.

INVESTOPEDIA EXPLAINS 'Production Gap'

This measurement can be used in conjunction with gaps in gross domestic product (GDP) and unemployment to analyze the economy at large. Discrepancies between the three gaps may indicate temporal economic factors that lie outside the norm.

RELATED TERMS
  1. Purchasing System

    A method used by businesses to buy products and/or services. ...
  2. Gap Risk

    The risk that an investment's price will change from one level ...
  3. Common Gap

    A price gap found on a price chart for an asset. These gaps are ...
  4. Breakaway Gap

    A term used in technical analysis. A breakaway gap represents ...
  5. Exhaustion Gap

    A gap that occurs after the rapid rise in a stock's price begins ...
  6. Nordic Model

    The social welfare and economic systems adopted by Nordic countries.
Related Articles
  1. Fundamental Analysis

    How Influential Economists Changed Our History

    Find out how these five groundbreaking thinkers laid our financial foundations.
  2. Entrepreneurship

    Cost-Push Inflation Versus Demand-Pull Inflation

    Gain a deeper understanding of aggregate supply and demand, forces which raise the price of goods and services.
  3. Forex Education

    The Fundamentals Of Forex Fundamentals

    Charting is not the only way to analyze the foreign-exchange market. Learn how to apply fundamental analysis to the economic indicators.
  4. Investing Basics

    Economic Indicators That Do-It-Yourself Investors Should Know

    Understanding these investing tools will put the market in your hands.
  5. Economics

    A Practical Look At Microeconomics

    Learn how individual decision-making turns the gears of our economy.
  6. Options & Futures

    Explaining The World Through Macroeconomic Analysis

    From unemployment and inflation to government policy, learn what macroeconomics measures and how it affects everyone.
  7. Active Trading

    Unearth Profits In Oil Exploration And Production

    Drill down into financial statements to tap into the right companies and let returns flow.
  8. Economics

    What are some limitations of the consumer price index (CPI)?

    Explore some of the basic limitations of the widely used economic indicator, the consumer price index, or CPI, and examine the criticism of its accuracy.
  9. Economics

    What is the difference between fiscal policy and monetary policy?

    Utilizing founding principles of macroeconomics through both fiscal and monetary policy can have drastic effects on a country's economic state.
  10. Economics

    Can the consumer price index (CPI) for individual areas be used to compare living cost among areas?

    Understand why the Consumer Price Index, or CPI, cannot appropriately be used for comparing the cost of living across different areas of the country.

You May Also Like

Hot Definitions
  1. Treasury Bond - T-Bond

    A marketable, fixed-interest U.S. government debt security with a maturity of more than 10 years. Treasury bonds make interest ...
  2. Weight Of Ice, Snow Or Sleet Insurance

    Financial protection against damage caused to property by winter weather specifically, damage caused if a roof caves in because ...
  3. Weather Insurance

    A type of protection against a financial loss that may be incurred because of rain, snow, storms, wind, fog, undesirable ...
  4. Portfolio Turnover

    A measure of how frequently assets within a fund are bought and sold by the managers. Portfolio turnover is calculated by ...
  5. Commercial Paper

    An unsecured, short-term debt instrument issued by a corporation, typically for the financing of accounts receivable, inventories ...
  6. Federal Funds Rate

    The interest rate at which a depository institution lends funds maintained at the Federal Reserve to another depository institution ...
Trading Center