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I am stuck on a diagram that shows the development of GDP over time period from '04 to '16. We have 4 graphs; actual GPD, and estimates of potential GDP made in '07, '10 and '15.

Now to the actual question. I am trying to understand why the different estimates for potential GDP differs in the earlier years. Why is the estimate made in 2015, when look ex. at the years 04 - 07, different than the estimate made in 2010.

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  • $\begingroup$ Potential GDP changes over time. If you estimate potential GDP in different years you will get different numbers. What is puzzling about that? $\endgroup$
    – csilvia
    Commented Oct 24, 2023 at 9:58
  • $\begingroup$ @csilvia I guess the OP wants to know about the sort of information that is used for estimation; sort of an introduction to forecasting. $\endgroup$
    – Giskard
    Commented Oct 24, 2023 at 11:59
  • $\begingroup$ @Giskard idk, the post says its the same graph with different time periods so difference should be in different data $\endgroup$
    – csilvia
    Commented Oct 24, 2023 at 14:14
  • $\begingroup$ Yes, the forecast for '16 depends on data from e.g.; '15, which is also forecasted in prior time periods, but is available (or can be more accurately estimated) in '15. An answer would probably expound on this concept. $\endgroup$
    – Giskard
    Commented Oct 24, 2023 at 14:29

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GDP data are constantly being revised because the first published GDP data are estimates made before all the data have been processed. Usually, it takes about 5 years to determine the actual GDP.

Potential GDP is estimated based on GDP data. Even when you estimate potential GDP for the same time period with different sets of data, you will obtain different results.

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