Updates on the Output Gap and Potential Growth Rate, and Monitoring Labor Market Indicators

2026

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This paper details revisions to the Bank of Japan's methodology for estimating the output gap and potential growth rate, incorporating updated GDP statistics and economic structure changes to provide a more accurate assessment of supply-demand balance and its implications for wages and prices.

* Revised methodologies for calculating the capital utilization rate, structural unemployment rate, and potential growth rate.
* Analysis of labor market indicators as complementary tools for monitoring the output gap and forecasting wages and prices.
* Empirical examination of the relationship between the output gap and consumer prices (Phillips curve) and potential growth rate drivers.

Output Gap, Potential Growth Rate, Labor Market, Economic Indicators, Bank of Japan

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