Price Developments  Reasons for a Rise in Inflation Taking Time Mindset  Experience of prolonged low growth and deflation  Supply Side  Large room for firms to raise productivity  Technological progress in recent years  High wage elasticity of labor supply  The pace of improvement in prices and inflation expectations has remained slow compared to the improvement in the output gap.
1. Firms' cautious wage- and price-setting stance 2. Sluggish increase in households' tolerance of price rises 3. Intensifying competition 8  Chart 9  II.