10 Some economists argue that, if the 2 percent inflation target had been set in Japan during the 1990s, the subsequent deflation would not have occurred (Braun and Waki [2006]).
However, since the rate of growth in total factor productivity also declined during the so-called lost two decades in Japan, it is also possible to say that there were problems on the supply side as well as on the demand side. The past recession possibly had lasting negative effects on productivity growth of the economy.