BoJ’s Nakaso sees analytical challenge in gauging reforms
Debate continues between demand- and supply-side theories
The features of standard economic models may be one reason why neither demand- nor supply-side economists have won the debate over what ails the Japanese economy, Bank of Japan (BoJ) board member Hiroshi Nakaso said on February 13.
In a speech to the Japan Society in New York, Nakaso noted business-cycle models focus on how the output gap is determined and assume trend growth is determined exogenously, while growth models examine trend growth and omit the output gap.
"This division of labour
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