While shortages of intermediate inputs have had some impact, labor supply has room to expand thanks to so-called labor hoarding during the pandemic. Differences in labor supply stance have also resulted in differences in wage growth between countries. In Japan, wages have risen, but the rate of increase has remained moderate.
Also, the recent surge in commodity prices due to supply factors puts greater downward pressure on the economies of commodityimporting countries through a decline in household real income and corporate profits. In this situation, attention will be focused on how firms pass increasing costs on to prices and how they determine the level of price increases that households are willing to accept.