9 Another question is whether long-term GDP growth has fallen as a result of the crisis. Experiences from previous financial crises indicate that there frequently is a connection. However, in the report mentioned, the OECD writes that it does not expect any decline in long-term GDP-growth (after 2015) due to the crisis. The OECD states that it will indeed decline, but as a result of demographic developments. At the Riksbank, the crisis has not led us to make any new assessment of the long-term GDP growth used in our models. We expect long-term GDP growth to be just above two per cent per year. Resource utilisation can also be measured in the labour market by, for instance, the employment rate 10 , unemployment, the employment gap and the hours gap. The  8  IMF (2010), World Economic Outlook October 2010. 9  See OECD (2010), OECD Economic Outlook, no. 87, May 2010. 10  The employment rate is defined as the proportion of the population aged 15–74 in employment, expressed as a percentage. 4  BIS Review 130/2010  employment gap and the hours gap have been estimated with the aid of HP trends and are thus subject to the problems entailed by such estimates. In contrast, the employment rate and unemployment are not associated with the same type of technical problems, but here it is instead difficult to know what can be considered to be normal levels for the respective variables.
By potential GDP, I mean the level of GDP that is compatible with a use of the available resources that is sustainable in the long term and that does not push up inflation. Resource utilisation may be either positive or negative. Potential GDP is often measured by using what is known as an HP trend. This is a statistical method used to show the underlying trend in GDP. By simultaneously trying to minimise deviations from actual GDP and to show the most even curve possible, the HP trend provides something in-between the often jagged curve which shows the actual GDP outcomes and a linear trend. An HP trend is a fairly good measure of the underlying longterm development in GDP during normal cyclical fluctuations. One problem with an HP trend as a measure of potential GDP is that its terminal point is normally close to the terminal point of the actual time series. This makes it a poor measure of potential GDP towards the end of the series. Often, it is precisely the terminal point that one is interested in. Another problem with an HP trend is that it is not a good measure if there are structural shifts in potential GDP – and it is natural to believe that such shifts take place in connection with a deep recession. These problems are clearly visible if one compares the most recent calculation of the GDP gap in the September Monetary Policy Update with the estimates made in real time.