I believe that the Federal Reserve’s asset purchases and other unconventional policy actions have helped, and are continuing to help, fill this gap and thus shore up aggregate demand.
Meanwhile, it can be said that inflation expectations have been on a rising trend on the whole, as evidenced (1) by the rise in the diffusion index for output prices in the June 2013 Tankan as well as the rise in the inflation expectations of firms, households, and economists, and (2) by the upturn in market-related indicators following a halt in their decline.