In fact, the best specifications of the same hybrid NKPC were evaluated by looking at out-of-sample dynamic projections of inflation over the period up to end-2014 based on two different estimation samples, one ending in 2007 and the other in 2009. Figure 6 shows that the results are satisfactory for both exercises.
First, to show the BoJ’s determination that it would overcome deflation at the earliest possible time through a strong and clear statement.