1IMES Newsletter
June 2021
The Institute for MonetaryandEconomicStudies

2021 BOJ-IMES Conference(IMES) was founded in 1982
as an internal organ of theBankofJapan,inofthecentennial.

Thecommemoration
Bank’s

IMES conducts a wide rangeof studies on the theoretical,institutional, and historicalaspects of monetary andeconomic issues. The IMES
also collects, conserves, andexhibits historical materials
related to monetary andeconomic issues.

Highlights
2021 BOJ-IMES ConferenceOpening remarks

Mayekawa Lecture

Keynote speechPolicy panel discussion

The IMES Newsletter aimstoprovide
thelatest
information about the IMES’
activities and major events.

The Institute for Monetary and Economic Studies (IMES) of the Bankof Japan (BOJ) held the 2021 BOJ-IMES Conference, titled“Adapting to the New Normal: Perspectives and Policy Challenges
after the COVID-19 Pandemic,” online on May 24–25, 2021.
The conference was held online for the first time since its
inauguration in 1983. It covered a wide range of issues regarding
economic perspectives and policy challenges in the post-pandemic
economy.
The conference began with opening remarks by Haruhiko Kuroda(Governor, BOJ). He first posed two questions as the central themeof the conference: what the new normal will look like that emerges
after the pandemic, and how we are going to adapt to this newnormal. He reviewed the issues
on economic perspectives andpolicy challenges after theCOVID-19 pandemic. He pointed
out that the world had undergone
irreversible change as it had
adapted to the pandemic byaccelerating digitalization. Heconcluded his remarks by looking
forward to a broad spectrum ofviews and insights during theconference into the postpandemic economy and policies.

BOJ Governor Haruhiko Kuroda
delivering his opening remarks(Photo: Misa Nakashima)
IMES Newsletter June 2021

2In the Mayekawa Lecture, Professor Olivier J.
©
Blanchard (Massachusetts Institute of Technology)
reviewed fiscal policy under low interest rates. He firstargued that low interest rates were an historical trendthat would likely continue. He then explained that debt
sustainability depends on the difference between theinterest rate and the growth rate, outlining theimplications for fiscal and monetary policy. Finally, heargued that fiscal spending was required to maintainaggregate demand against the COVID-related downturnand that policies that trigger private investment wereneeded, while avoiding large fiscal deficits.

ProfessorAthanasios

Orphanides(Massachusetts Institute of Technology,
Honorary Adviser to the IMES) delivering
the keynote speechProfessor

OlivierJ.

Blanchard(Massachusetts Institute of Technology)
delivering the Mayekawa Lecture

In the keynote speech, Professor Athanasios
Orphanides (Massachusetts Institute of Technology,
Honorary Adviser to the IMES) reviewed and praised
the responses of central banks to the COVID-19 crisis
by noting that they had unleashed the power of theirbalance sheets. He pointed out that the balance sheets
were used effectively as a potential backstop against
adverse market reaction and that quantitative easing had
compressed term premia and reduced the cost ofrefinancing of government debt, which facilitated fiscalexpansion. In light of these fiscal-monetary interactions,
he concluded by discussing how central bankindependence could be best protected.

The policy panel discussion, moderated by Professor Kazuo
Ueda (Kyoritsu Women’s University and University of Tokyo,
IMES Chief Councillor), had six panelists: Gita Gopinath(Economic Counsellor and Director of the Research
Department, International Monetary Fund), Charles L. Evans(President, Federal Reserve Bank of Chicago), Tiff Macklem(Governor, Bank of Canada), Philip R. Lane (Member of the
Executive Board, European Central Bank), Stefan Ingves(Governor, Sveriges Riksbank), and Masazumi Wakatabe(Deputy Governor, BOJ). They discussed a broad range ofissues facing policymakers in the wake of the COVID-19

Moderator: Professor Kazuo Ueda
(Kyoritsu Women’s University andUniversity of Tokyo, IMES ChiefCouncillor)
IMES Newsletter June 20213Panelists [From top-left]: Gita Gopinath (International Monetary Fund), Charles L. Evans (Federal Reserve
Bank of Chicago), Tiff Macklem (Bank of Canada), [From bottom-left] Philip R. Lane (European CentralBank), Stefan Ingves (Sveriges Riksbank), and Masazumi Wakatabe (BOJ)

pandemic. The topics included the short-termand long-term macroeconomic implications ofthe pandemic, its distributional consequences,monetary policy responses, and new challenges
for central bankers.
In the presentation sessions, three prominent
scholars gave presentations on issues related todebt sustainability and the nature of work after
the COVID-19 pandemic, and these issues werethen discussed by the conference participants.
In the concluding remarks, Professor Carl E.
Walsh (University of California, Santa Cruz,
Honorary Adviser to the IMES) summarized
the issues raised in each session and concluded
that the discussions at the conference offered
important insights into the policy challenges
and into the factors that would influence theshape of the post-COVID-19 economy.

[From left] Professor Atif R. Mian (Princeton University) presenting “AProfessor Carl E. WalshGoldilocks Theory of Fiscal Policy”; Professor Markus K. Brunnermeier(University of California,(Princeton University) presenting “Debt as Safe Asset: Mining the Bubble -Santa Cruz, Honorary

FTPL with a Bubble & MMT”; Professor David Autor (Massachusetts

Adviser to the IMES)

Institute of Technology) presenting “The Nature of Work After the COVID

delivering the concluding

Crisis: Too Few Low-Wage Jobs”

remarks
IMES Newsletter June 2021

4

Recent Publications from the IMES

IMES Discussion Paper SeriesNo. 2021-E-4“Monetary and Macroprudential Policies under Dollar-Denominated Foreign
Debt” by Hidehiko Matsumoto, May 2021

No. 2021-E-3“Security Risks of Machine Learning Systems and Taxonomy Based on theFailure Mode Approach” by Kazutoshi Kan, May 2021

No. 2021-E-2“A Quest for Monetary Policy Shocks in Japan by High Frequency Identification”
by Fumitaka Nakamura, Nao Sudo, and Yu Sugisaki, April 2021

No. 2021-E-1“Procyclical Leverage and Crisis Probability in a Macroeconomic Model of BankRuns” by Daisuke Ikeda and Hidehiko Matsumoto, March 2021

No. 2020-E-15“Digital Money as a Unit of Account and Monetary Policy in Open Economies”
by Daisuke Ikeda, December 2020

No. 2020-E-14“Necessities, Home Production, and Economic Impacts of Stay-at-HomePolicies” by Makoto Nirei and Nao Sudo, December 2020

No. 2020-E-13“Productivity and Trade Dynamics in Sudden Stops” by Felipe Benguria,Hidehiko Matsumoto, and Felipe Saffie, October 2020

Monetary and Economic Studies Vol.38 / November 2020“Security Analysis of Machine Learning Systems for the Financial Sector” by Shiori Inoue and Masashi
Une“The Disclosure of Non-GAAP Performance Measures and the Adoption of IFRS: Evidence fromJapanese Firms’ Experience” by Yuta Shibasaki and Chikara Toyokura“Monetary Policy in the 1990s: Bank of Japan’s Views Summarized Based on the Archives and OtherMaterials” by Masanao Itoh, Yasuko Morita, and Mari Ohnuki

IMES Newsletter June 2021
Do not reprint or reproduce without permission.
All correspondence about this issue should be sent toInstitute for Monetary and Economic Studies (IMES), Bank of Japan
2-1-1, Nihonbashi-Hongokucho, Chuo-ku, Tokyo 103-8660, Japan
Phone: +81-3-3279-1111
Fax: +81-3-3510-1265
E-mail: imes.journals-info@boj.or.jp
URL: https://www.imes.boj.or.jp/english/index.html
IMES Newsletter June 2021