The Maqam Index: Quantifying Unrealized Economic Output

While GDP measures realized output, it fails to capture an economy’s unrealized productive potential. Many nations possess deep human capital, institutional capacity, and innovation potential, yet their true economic standing is not fully reflected in GDP. The Maqam Index is a quantitative framework for measuring unrealized economic output—defined as the gap between potential productive capacity and realized GDP. The model decomposes national performance into three measurable dimensions: Potential Capacity (PC), Conversion Feasibility (CF), and Value Leakage (VL). Formally expressed as Maqam = ((α × PC) + (β × CF) – (γ × VL)) ÷ GDP, with α + β + γ = 1, the Index enables cross-country and longitudinal comparison using public, replicable indicators. It provides a new diagnostic for evaluating macroeconomic efficiency, investment attractiveness, and reform effectiveness—especially in emerging economies. This Version 1.0 Working Paper introduces the theoretical foundation, interpretive framework, and illustrative cases for future empirical calibration.