Time for central bankers to reconsider the output gap
There has been a major shift in the pattern of global growth over recent years.
Between 1960 and 2003, some 81.2% of the aggregate growth in world gross domestic product (GDP) was attributable to growth in what the UN defines as high-income countries, that is, broadly the advanced economies and some oil producers. But then from a 79.2% level in 2003, this proportion fell sharply in the following years to 51.7% by 2006. This reflected the process of globalisation of output, exemplified in the
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