By: Ricardo

In reply to Rajat. the trend line is the prior cycle, and it's 0.557%m/m -- which is around 6.75% AR pace. Perhaps that's touch on the high side, even if we had ngdp running at your ideal of around 5%y/y. I don't need the prior trend to make my low inflation case stick -- all i really need is the obvious point that capacity was being added in 2007/8 in anticipation of something like the prior trend. It's no wonder that firms have been slow to invest this cycle. outside of a few sectors, last cycle's investment hasn't really paid off very well.