Manufacturing 85  Wholesale and retail trade Medical and nursing care  Other  Construction  Accommodations, eating and drinking services  0.0 Manufacturing  0 Wholesale and retail trade  0.5  Medical and nursing care  2  80 04 05 06 07 08 09 10 11 12 13 14 15 16 17  Chart 14  Output Gap and Changes in Supply Capacity Output Gap and Labor Market Tightness 8.0  % points  s.a., ratio Output gap (left scale)  s.a., %  1.5  3.0  1.5  2.0  2.5  1.3  2.5  2.0  3.0  1.5  3.5  1.0  6.0 Active job openings-toapplicants ratio (right scale)  4.0  Unemployment rate (right scale, reverse axis)  2.0  Capital and Labor Input Growth (Contribution to the Potential Output) % points  % points  1.6  Capital input (left scale) 1.2  Labor input (right scale)  0.8  1.1  0.0  4.0  0.5  0.7  4.5  0.0  5.0  -0.5  -2.0 -4.0 0.5  -6.0 -8.0  0.3 83  87  91  95  99  03  07  11  0.4  0.9  15  Sources: Ministry of Health, Labour and Welfare; Bank of Japan.
A good deal of the effect of easier monetary policy comes via the housing sector – through higher prices, which increase perceived wealth and encourage higher construction, through higher spending on durables associated with new dwellings, and so on. These are not the only channels but, according to research, together they account for quite a bit of the direct effects of easier monetary policy.