Output gap estimates the spread between actual economy growth and its potential level. Potential level can be achieved if all resources in the economy are utilized at their long-term sustainable rate. Global Financial Crisis started negative output gap and it was until recently the gap begins to close in most advanced economies, which provides evidence of increasing demand and strengthening economy. Closing gap also theoretically indicates full employment is being approached or has been achieved, yet most economies are far from overheating.

US has slightly passed full capacity and the gap is closing rapidly. A decrease in spare capacity can reduce the competition pressure on supply side and lead to an increase in price level, allowing more profitability for corporates. It is also expected that peaks are not coming soon, i.e. corporates have time to embrace the economy boon.