More generally, it is important to examine whether people’s medium- to long-term inflation expectations – which, under the deflation that lasted for over 15 years, are said to have consistently remained lower than those in the United States – are projected to be reanchored at around 2 percent, comparable to the level in the United States (Chart 12).
It should be noted, however, that medium- to long-term inflation expectations are not tied to specific economic indicators, and thus are difficult to measure. It might be possible to retroactively acknowledge developments in such expectations as changes in the intercept of the Phillips curve.