Expansion in the economy's supply capacity, such as improvements in the labor force participation rate and labor productivity, has been easing upward pressure on wages and prices recently.
Changes in the Economy's Supply Capacity and Conduct of Monetary Policy I have mentioned factors associated with the expansion of the economy's supply capacity as the causes of the delay in growth in prices.
Changes in the Economy's Supply Capacity and Conduct of Monetary Policy So far, I have mentioned several factors associated with the expansion of the economy's supply capacity as the causes of the delay in growth in wages and prices.
In Japan, various changes have taken place in the economy's supply capacity since the 1990s due to deficient demand and deflation that have lasted for a protracted period.
If people who previously had concentrated on household chores and child rearing join the labor force,they will increase the economy's supply capacity, bringing additional income to households.
In other words, although an expansion of the economy's supply capacity may delay rises in wages and prices, I do not think that it will hold them back for any protracted period.
To summarize,I consider one of the major reasons behind the delay to be the expansion of the economy's supply capacity caused by an increase in the labor supply and by firms' efforts toward increasing productivity.
Expansion in the economy's supply capacity, in the short run, reduces upward pressure on wages and prices; in the long run, however, it could raise the economy's growth potential and contribute to pushing up wages and prices, mainly through an increase in permanent income.
One of these members noted that efforts on the part of firms having faced supply-side constraints-- namely, to raise productivity and make investment aimed at increasing production capacity--would support an expansion in the economy's supply capacity, thereby raising its long-term growth potential.
An increase in demand has been supporting an expansion in the economy's supply capacity, such as through firms' efforts to raise productivity, business fixed investment with a view to expanding production capacity, and an increase in the labor force participation rate.
第2は、経済の供給サイドに与える影響である。
The second aspectis the impact of low interest rates on the supply side of the economy.
住宅市場の機能不全も経済の供給側に打撃を与えました。
Malfunctioning housing markets also hit the supply side of the economy.
まず、労働力の減少という経済の供給サイドのルートを通じて、成長率の下押し要因となります。
First, it will become a downside factor for economic growth via the economy's supply side-- namely, a decline in the labor force.
高齢化の進展は、働き手の不足という点で経済の供給面から成長の制約要因となります。
Population aging will hamper growth from the supply side of the economy in that it will bring a shortage of workers.
It is thus necessary to strengthen the supply side ofthe economy by promoting the introduction of new technology and by improvinginfrastructures such as transportation and telecommunications.
Careful monitoring of such a possibility is required.3I have so far examined improvements on the supply side of the economy from the standpoint of aspects such as corporate profits, demand for labor, employment and wages, and labor supply.
A different member added that moves toward strengthening the supply side of the economy were also likely to strengthen the effectsof the current monetary easing policy through a rise in the natural rate of interest.
I consider that, in order to assess the supply conditions of the economy, particularly the recent ones, it is important not to solely rely on the estimates of the potential growth rate, but to make a comprehensive assessment taking into consideration the actual situation of firms and households.
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