Not exact matches
If real GDP were to increase at 10.3 % instead of 2.5 % in 2015, then the government should receive, at a minimum, an extra $ 6.6 billion in tax revenue thanks to
economic growth (this calculation assumes that
nominal GDP grows at the same proportion as real GDP; it is more likely that
nominal GDP would rise even
higher as such quick
economic growth would be inflationary, pushing that $ 6.6 billion figure even
higher).
Finally, in a
nominal GDP targeting regime, a decline in r - star caused by slower trend
growth automatically leads to a
higher rate of trend inflation, providing a larger buffer to respond to
economic downturns.
As Bank of Japan governor Haruhiko Kuroda put it: «With the level of
nominal interest rates being
high, Japan's economy will have more policy room to mitigate the impact of future
economic downturns, or will be equipped with a sort of insurance for sustained
economic growth.»