With regard to labor supply, we have had a pickup in labor force participation among prime-age workers (those 25 to 54 years old) that is, at least for now, boosting the supply side of the economy. The participation rate of prime-age workers has risen about 1-1/2 percentage points over the past few years.
This is because, if the degree of monetary policy accommodatingness is inadequate, economic recovery will be delayed and make it difficult for the economy to withstand the shocks from structural reform. If on the other hand easing is excessive, then this could weaken economic agents’ incentives for reform.