For example, if such commitment supports changes in business structures and tapping new demand, and promotes business fixed investment that embodies new technology as well as research and development investment, it will be able to increase capital stock and heighten total factor productivity.
Improvements on the supply side of the economy, and thus in the outlook for permanent income, can be expected to result in a sustainable increase in demand. 1 Third, since it is open-ended, markets’ expected duration of asset purchases can vary depending on a change in the economic outlook.