From Newsmax:

In a presentation to an economics conference, St. Louis Federal Reserve President James Bullard said it was hard to accurately measure the gap between what the economy is producing and its full potential.

He said calculations aimed at measuring the output gap do not take asset price bubbles into consideration, so if much of the current drop in output was tied to the bursting of the housing bubble, "then today's output gap would be smaller than it appears," which would mean a higher risk of inflation.

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