Capital Markets: Winter 2019

Better to Be Behind? ​ Fundamentals

• The output gap measures economic output relative to potential, with a lower output gap indicating more growth left in the cycle • While most major regions are at or near potential output, some, such as Japan and Europe, are further behind the U.S.

U.S. Output Gap

Source: FactSet and Oxford Economics. Shaded regions indicate U.S. recessions.

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