Sometimes on Bloomberg, WSJ, FT, etc you can hear experts talking about GDP being below or above trend. My question is, what exactly is trend? How do economists come up with the trend line for GDP growth and why is it important?
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Mean's it's trending below bro
You can look at the compound annual growth rate (CAGR) of GDP since the 1950s or 1980s and extrapolate to today. GDP of 1.5% vs. 3% doesn't sound like a big difference, but it can add up to trillions of dollars of lost economic activity over 5-10 years.
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