The study aims to estimate potential GDP and output gap of the Greek economy. Potential GDP is, in principle, a summary indicator which illustrates the ability of an economy to achieve long-term, sustainable and non-inflationary economic growth. Similarly, the output gap is an indicator of the degree of overheating or under-utilization of productive resources in relation to potential GDP. Both constitute important tools in economics as a means to evaluate the capacity of an economy and to determine its position during the economic cycle.
