Output Gaps, Again
Original Report
Primarily from the production function approach (discussion here). Figure 1: CBO output gap, calculated using latest BEA data and February 2026 estimate of potential GDP (dark blue), projected using...
Primarily from the production function approach (discussion here). Figure 1: CBO output gap, calculated using latest BEA data and February 2026 estimate of potential GDP (dark blue), projected using February CBO GDP and potential GDP (lilac), CBO GDP omitting fiscal impulse from BBB (sky blue dashed blue), WSJ January survey mean and CBO potential GDP […]
Glass House Analysis
This story reflects the interconnected nature of modern economic systems, where developments in one sector inevitably affect others. Understanding these connections is essential for grasping how policy decisions and market movements translate into real-world outcomes for families, workers, and communities. The economy is not an abstract system of numbers—it's the sum total of decisions about who works, who prospers, and who struggles.
The implications extend beyond the immediate news cycle. Every economic development creates ripples that affect employment, prices, and opportunities in ways that may not be immediately visible but are deeply felt. By tracking these connections, we can better understand how the economy truly works—not as an abstract machine, but as a human system shaped by and shaping the lives of millions.
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