In fact, as seen in the “secular stagnation” debate of recent years, there has been active debate in major advance economies regarding the possibility that, following the large shocks they have suffered, the steady state may have shifted downward due to a variety of factors.
9 Meanwhile, whereas Japan’s potential growth rate until the early 1990s had been in the range of 3 to 4 percent, it subsequently followed a downward trend, falling to around 1 percent in the second half of the 1990s and further to a level below 0.5 percent after the collapse of Lehman Brothers (Chart 7).