Others have also argued that the interaction between inflation on the one hand and tax and financial reporting systems geared to historical cost accounting on the other creates a significant bias against capital-intensive investment projects and all investment with a long pay-back period, and a bias in favour of highly-geared companies and investments with a short pay-back period.
Output gap  Next, I would like to talk about developments in the output gap, which can be defined as a gap between the aggregate demand and supply capacity of Japan’s economy. In short, the output gap is likely to improve steadily against the backdrop of an expansion of demand such as business fixed investment and private consumption.