Potential growth and natural yield curve in Japan

We estimate the yield curve gap in Japan and examine whether it has contributed to sustained low growth inflation rates observed since beginning 2000s. use a semi-structural empirical model that generalizes Laubach Williams’ approach, considering entire range of maturities interest dealing with issue mixed frequency sampling. An important result is that, even absence zero lower bound, monetary fiscal policies proved ineffective bringing Japanese economy out situation prolonged stagnation inflation. This happened when moved below its natural level.