In fiscal 2008, industrial production in Japan fell by more than 10 percent and real GDP contracted by about 4 percent. There were a number of reasons why Japan’s economy was hit particularly hard. One notable factor is that, since Japanese products and technologies play an essential part in global supply chains, the decline in global final demand affected Japanese firms especially severely.
5 The fact that estimates of underlying trend inflation remain a bit on the soft side reinforces the evidence that the Phillips curve is very flat, a key element of the post-crisis  3  For the share of overall income going to workers, see, for instance, data on the labor share in the nonfarm business sector--available from the FRED database on the Federal Reserve Bank of St. Louis’s website at https://fred.stlouisfed.org/series/PRS85006173--and Bureau of Labor Statistics (2017).