Abstract
AbstractThe inflation gap in the economy is often detected by specialists in economic policies by measuring the potential output gap in order to measure inflation in that economy, and knowing that the level of GDP is consistent with no pressure to raise or lower prices. In this context, Whenever there is an unsustainable large production volume that leads to inflationary pressures, and when the volume of production is less than what was planned, there will be stagnation and a decrease in prices and thus the absence of inflation, so the output gap is a brief indicator of the relative supply and demand elements in economic activity. Output measures the degree of inflationary pressures in the economy.
