A more fundamental background behind stagnant demand over a long period, and the phenomenon of deflation under an output gap stemming from such stagnant demand, could be ascribed to the weakening of medium- to long-term growth expectations. At present, Japan’s economy is faced with difficult challenges, and thus it is essential to accurately and calmly recognize the big picture of Japan’s economy.
Eventually, it is necessary that the activity of private firms, which are the central player of the economy, becomes spurred, and future growth expectations rise. On that point, in all ages, what blazed the economic path was the exertion of innovation by private firms.