TOKYO -- Japanese demand has surpassed the nation's output capacity in two straight quarters for the first time in three years, yet the economy still lacks a spark as stubbornly low wages block the government's long-awaited virtuous cycle.
The difference between actual and potential gross domestic product -- in other words, total demand for goods and services versus total output capacity -- is known as the GDP gap, or output gap. Cabinet Office data released Wednesday shows a positive GDP gap of 0.1% for October-December 2016 and January-March of this year, signaling higher demand than supply.
