Final answer:
The formula for calculating the growth rate in potential GDP is GDP at end date / GDP at starting date = (1 + growth rate of GDP)^years.
Step-by-step explanation:
The formula for calculating the growth rate in potential GDP is GDP at end date / GDP at starting date = (1 + growth rate of GDP)^years. For example, if an economy starts with a GDP of 100 and grows at a rate of 3% per year, after 25 years the GDP would be 100 * (1.03)^25 = 209.
This formula is similar to the formula for compound interest, where the principal amount is multiplied by the growth rate raised to the power of the number of years. In this case, the GDP at starting date is the principal amount, the growth rate of GDP is the interest rate, and the number of years represents the time over which the GDP grows.