How could you estimate the GDP Gap?

Question

How could you estimate the GDP Gap?

Answer 1

Depends on parameters for analysis, for instance simplest labor-resources approach would look something like this:

Labor force - unemployed = Employed

Labor force - NAIRU = Potentially employed

Employed - Potentially employed = Capacity labor force

Current GDP / Employed = Output per employed

(Capacity labor force + Employed) = Potential GDP

Current GDP - Potential GDP = Output Gap

(though in reality productivity does not increases linear way)

But there are many methods using other factors, and combinations of factors (capital, degree of specialization, level of foreign trade, efficiency/waste, etc.), also possible take into account development paths, thus depreciation, production function, induced dynamics of factors, etc.