Labour Productivity = real GDP/Aggregate Hours worked
Potential GDP is estimated by = Aggregate Hours worked x Labour Productivity
Doesn’t this just mean potential GDP is estimated by real GDP?
Something doesn’t really feel right.
Labour Productivity = real GDP/Aggregate Hours worked
Potential GDP is estimated by = Aggregate Hours worked x Labour Productivity
Doesn’t this just mean potential GDP is estimated by real GDP?
Something doesn’t really feel right.