Japan's Economy and Monetary Policy
Speech at a Meeting with Business Leaders in Aomori
Kikuo Iwata
Deputy Governor of the Bank of Japan
Introduction
It is my pleasure to have the opportunity today to exchange views with administrative,
financial, and business leaders in Aomori Prefecture. I would also like to take this
opportunity to express my sincere gratitude for your cooperation with the activities of the
Bank of Japan's Aomori Branch.
Today, I would like to have your views on the actual situation of the local economy, as well
as your candid opinions about the Bank's policies and activities. Before exchanging views
with you, I will briefly explain the recent economic developments at home and abroad, and
then touch on some points regarding monetary policy.
I. The Current Situation of Economic Activity and Its Outlook
The economic growth in Japan has taken hold more firmly since last autumn, and the Bank
judges that the economy has been turning from its moderate recovery trend toward a
moderate expansion. Looking ahead, from fiscal 2017 through fiscal 2018, improvement in
overseas economies and the government's large-scale stimulus measures that were
formulated last year are expected to clearly have positive effects on the economy. Under
these circumstances, Japan's economy is likely to continue expanding and keep growing at a
pace above its potential, mainly through fiscal 2018.
In what follows, I would like to talk about the current situation of Japan's economic activity
and its outlook in more detail.
Let me first touch on overseas economies affecting Japan's economy. In the first half of
2016, pessimistic views about the global economy prevailed; concerns heightened regarding
the slowdown in emerging economies including China, and the global financial markets
became volatile, triggered by the so-called Brexit. However, the global economy hit bottom
in the first half of last year, and its growth momentum seems to have strengthened thereafter,
with various economic indicators improving markedly. Specifically, remarkable
improvements have been observed in the manufacturing sector and trade activity, both of
which had lacked growth momentum after the global financial crisis (Chart 1). Their
positive effects have spread globally, and emerging economies -- which tended to lag
behind advanced economies -- also have been improving. In the NIEs and the ASEAN
economies, for example, although they were sluggish in 2015 and 2016, their exports
clearly have picked up and consumer confidence has improved. In China, the economy has
continued to see stable growth on the whole, as evidenced by the fact that the year-on-year
GDP growth rate for the January-March quarter of 2017 increased somewhat from the
previous quarter.
Looking forward, growth in emerging economies is expected to become solid on the back of
the steady growth in advanced economies and the effects of policy measures taken by
emerging economies. The latest World Economic Outlook (WEO) released by the
International Monetary Fund (IMF) projects that the global economic growth rate will
increase, registering 3.1 percent in 2016, 3.5 percent in 2017, and 3.6 percent in 2018 (Chart
2). The Bank is also monitoring developments in risk factors and their impacts on the global
economy; risks include those of the new U.S. administration's economic policy and of
political situations in Europe, as well as geopolitical risks.
Let me now turn to Japan's economy. Japan's exports and production have been on an
increasing trend amid the global improvement mainly in the manufacturing sector and trade
activity (Chart 3 [left chart]).
Against this background, in the corporate sector, profits have been at record high levels
(Chart 3 [right chart]). Business sentiment has been favorable on the whole, and business
fixed investment has continued on a moderate increasing trend. A feature of the current
economic recovery phase is that improvement in business sentiment has been widely seen,
not only for firms in metropolitan areas and large firms but also for firms in local areas and
Tankan
small firms. The diffusion indexes (DIs) by region for business conditions in the
(Short-Term Economic Survey of Enterprises in Japan) have been positive as a trend for all
regions since the December 2013 survey (Chart 4). The DIs by firm size have been well
above zero for large firms as well as small firms (Chart 5). This was not the case with the
previous economic recovery phase from 2002 through 2008 before the global financial
crisis.
In the household sector, Japan's labor market conditions have continued to tighten steadily.
The unemployment rate has declined to the range of 2.5-3.0 percent -- which is virtually full
employment -- for the first time since 1994. The active job openings-to-applicants ratio has
risen to 1.48 times, the level last seen in 1974, exceeding the peak level observed in the
"asset bubble" period (Chart 6). Looking ahead, labor market conditions are expected to
tighten further as the economy continues growing at a pace above its potential.
In this context, some economists argue that labor shortage may constrain Japan's economic
growth. However, I am in dissent with this argument and believe that labor shortage will
instead raise labor productivity through, for example, a gradual increase in labor-saving
investment, thereby encouraging further economic growth.
The tight labor market conditions also have been exerting gradually increasing upward
pressure on wages. In fact, the year-on-year rate of change in hourly wages of part-time
employees, which are particularly sensitive to labor market conditions, has risen to the
range of 2.5-3.0 percent. Furthermore, many firms appear to have raised their base pay for
the fourth consecutive year in the annual spring labor-management wage negotiations this
year. Base pay rises are especially evident in small and medium-sized firms that face acute
labor shortage, amid improvement in business conditions spreading beyond large firms
(Chart 7).
Next, I will talk about price developments. Although a decline in energy prices since the
second half of 2014 had exerted downward pressure on consumer prices, such pressure
dissipated and energy prices turned toward pushing up general prices. The year-on-year rate
of change in the consumer price index (CPI) excluding fresh food has been slightly positive
since January 2017. Meanwhile, that in the CPI excluding fresh food and energy has
continued to be positive as a trend for around three and a half years (Chart 8). Japan's
economy is no longer in deflation, which is commonly defined as a sustained decline in
prices.
Nevertheless, we must admit that Japan's inflation has been relatively moderate, despite the
fact that corporate profits have been at record high levels and the labor market has been at
virtually full employment. This is in striking contrast to the situations in the United States
and Europe, where inflation rates have already recovered significantly (Chart 9 [left chart]).
What lies behind such moderate inflation is the fact that, in Japan, people's perception of
future price developments -- that is, inflation expectations -- tends to be largely affected by
actual inflation rates, which declined in the past. This largely adaptive formation
mechanism of inflation expectations is unique to Japan, and is rarely observed in other
major economies. In fact, despite the global fall in crude oil prices, inflation expectations in
the United States and Europe have barely declined (Chart 9 [right chart]). This is because
the degree to which inflation expectations are affected by past inflation is smaller in these
economies.
What creates such differences? My answer is that the forecasts of prices based on past
inflation have performed well in Japan, as the inflation rate was persistently low for a long
time during the deflationary period since the second half of the 1990s. During this period, if
the actual inflation rate in the previous year was 0 percent, for example, it was reasonable to
project that the inflation rate would be 0 percent again in the following year, rather than rise
to 2 percent.
However, Professor Milton Friedman -- a distinguished scholar of economics -- made the
following argument, stating that how inflation expectations are formed among the public is
subject to change. If wages are unchanged in a situation of continued inflation, employees'
real income will be lost to the extent of inflation. They would not tolerate such a situation
forever; rather, they eventually will start to forecast future inflation in a forward-looking
manner and demand wage increases based on the forecast. This is an example for wages,
but the same mechanism will be in place for retail prices of products and services; in an
inflationary phase, firms will start to anticipate future inflation and raise their retail prices
based on their forecast.
As for the outlook, the year-on-year rate of increase in consumer prices is expected to
accelerate, as upward pressure on wages heightens amid a further tightening of labor market
conditions, and as a positive contribution of energy prices to inflation increases. Friedman's
argument suggests that, during this inflationary phase, inflation expectations in Japan will
become less affected by past inflation, with a gradually increasing number of people
formulating their inflation expectations in a forward-looking manner, as is the case in the
United States. Furthermore, as I will talk about more later, the Bank will continue to pursue
powerful monetary easing with the aim of achieving its price stability target of 2 percent.
Against this backdrop, although uncertainty about future developments in inflation
expectations warrant attention, Japan's inflation rate is likely to gradually increase toward
the price stability target of 2 percent.
II. Thinking behind the Conduct of Monetary Policy
Next, I would like to talk about the thinking behind the Bank's conduct of monetary policy.
Since last September, the Bank has been conducting monetary policy under the framework
of "Quantitative and Qualitative Monetary Easing (QQE) with Yield Curve Control." This
framework consists of two components (Chart 10).
The first is an inflation-overshooting commitment. This is the Bank's strong commitment
that it will continue expanding the monetary base until the year-on-year rate of increase in
the observed CPI exceeds 2 percent and stays above that level in a stable manner. You may
wonder why monetary easing will be continued until the inflation rate exceeds, not just
reaches, 2 percent. In Japan, the view that prices will not increase -- the so-called
deflationary mindset -- has been entrenched among people under prolonged deflation. It is
crucial, therefore, that the public actually experience inflation above 2 percent and thereby
the perception takes hold among them that prices of goods and services tend to go up every
year by around 2 percent. With this in mind, the Bank has committed itself to continue with
large-scale monetary expansion until such situation is achieved through this
inflation-overshooting commitment.
The second component is yield curve control. Under yield curve control, the Bank has been
facilitating the formation of the yield curve that is considered most appropriate for
achieving the price stability target of 2 percent, taking account of developments in Japan's
economic activity and prices as well as financial conditions. At present, the Bank sets the
short-term policy interest rate at minus 0.1 percent and the target level of the 10-year
Japanese government bond (JGB) yields at around 0 percent, conducting JGB purchases so
as to achieve this target level.
As I explained earlier, although the economic growth in Japan has taken hold more firmly,
the inflation momentum is not yet sufficiently firm and there is still a long way to go before
achieving the price stability target of 2 percent. Risks have continued to be skewed to the
downside, particularly those regarding developments in overseas economies and in firms'
and households' medium- to long-term inflation expectations. Under these circumstances, I
believe that it is necessary that the Bank persistently pursue monetary easing under "QQE
with Yield Curve Control," aiming to lower real interest rates, taking advantage of lowered
nominal interest rates.
Now I would like to bring up my views on two proposals recently heard from some
economists on the Bank's conduct of monetary policy.
The first proposal is that the Bank should start raising interest rates, as the global
environment surrounding interest rates has been changing against the background of the
global economic growth gaining momentum and the Federal Reserve pushing forward the
rate hike process.
As often pointed out, nominal interest rates in Japan of late are lower than those in the
United States for both short and long maturities (Chart 11). However, it is not nominal but
real interest rates -- calculated by subtracting inflation expectations from nominal interest
rates -- that determine monetary easing effects on the economy. With this in mind, if recent
real interest rates in Japan are compared with those in the United States, it is evident that
long-term real interest rates are lower in Japan while short-term real interest rates are higher.
This is because inflation expectations are lower in Japan than in the United States. In other
words, unlike nominal interest rates, it is not necessarily the case that real interest rates in
Japan are significantly lower than those in the United States.
Moreover, while the inflation rate in the United States already has been close to 2 percent,
in Japan there is still a long way to go to achieve the price stability target of 2 percent. This
means that monetary easing is still necessary in Japan in light of achieving the price
stability target, and I do not think at all that it is time that we reduce the level of monetary
accommodation, which may not be very high at present compared to that in the United
States, by raising interest rates.
The second proposal is with regard to the Bank's price stability target of 2 percent. Some
economists argue that there may be no need to aim at higher inflation than the current level
as Japan's economic growth rate has been increasing, or that 1 percent -- instead of 2
percent -- is appropriate for Japan's price stability target level since the inflation rate does
not accelerate easily in Japan.
To argue against this kind of proposal, let me look back on short-term interest rate
developments in the United States and Japan since the outbreak of the global financial crisis.
When an economy suffers from a negative shock and demand declines significantly, as was
the case following the global financial crisis, it is crucial to reduce real interest rates
sufficiently to stop the decline in demand and work toward its prompt recovery. From this
perspective, both the Federal Reserve and the Bank of Japan conducted monetary easing
after the global financial crisis, thereby reducing short-term nominal interest rates to almost
0 percent (Chart 12).
However, developments in real interest rates, which are a determinant of monetary policy
effects, show that while short-term real interest rates in the United States declined
significantly after the global financial crisis and remained in negative territory thereafter,
those in Japan actually increased and stayed in positive territory. It was not until the
introduction of QQE in 2013 that short-term real interest rates in Japan started to follow a
declining trend, entering and then remaining in negative territory.
As we have just seen, even though short-term nominal interest rates in Japan and the United
States were reduced to 0 percent, the level of short-term real interest rates in Japan was
higher than that in the United States. This is due to the difference in the levels of inflation
expectations, which are subtracted from nominal interest rates in calculating real interest
rates. Although inflation expectations declined both in the United States and Japan right
after the global financial crisis, you will find striking differences between these two
economies in developments following the crisis. In the United States, the extent of decline
was only marginal; inflation expectations soon bottomed out and have been at around 2
percent in a stable manner. In Japan, inflation expectations -- which had been much lower
than those in the United States even before the global financial crisis -- declined to a large
extent, and thereafter remained in negative territory for a prolonged period until 2013. This
explains why short-term real interest rates in Japan remained higher than those in the United
States.
By the same token, the main reason why the differential between long-term real interest
rates in Japan and those in the United States was far narrower than the differential between
long-term nominal interest rates for the two is because inflation expectations in Japan
remained lower than those in the United States (Chart 13).
In Japan, where inflation expectations are low and tend to decline further in a recession
period especially, real interest rates cannot be lowered sufficiently to provide appropriate
monetary accommodation, even with nominal interest rates of 0 percent. In contrast, in the
United States, where inflation expectations have been stable at around 2 percent, a reduction
in nominal interest rates will result in a sufficient decline in real interest rates, providing
adequate monetary accommodation. In other words, without reducing nominal interest rates
to negative territory as in Japan, sufficient monetary easing effects can be obtained in the
United States while alleviating impacts on financial institutions of low interest rates.
Although the epicenter of the global financial crisis was outside of Japan, its economy
suffered a more significant downturn thereafter than did those of the United States and
Europe (Chart 14). Moreover, the price stability target of 2 percent has not been achieved
yet despite the large-scale monetary easing since the introduction of QQE in 2013. It is
undeniable that one of the most important factors behind this is that there was limited room
for a reduction of real interest rates -- or for monetary easing -- in Japan, as inflation
expectations stayed at low levels, or declined significantly, after the global financial crisis.
With these factors in mind, the Bank has been conducting monetary policy to achieve the
price stability target of 2 percent, with a view to creating an environment where real interest
rates can be lowered sufficiently and thereby the economy can be supported effectively
even when adverse shocks hit the economy. The price stability target is set at around 2
percent in many major economies, including Japan. This is because of the view shared
globally that it is important to anchor inflation expectations at 2 percent and to secure
sufficient room for a reduction of real interest rates, by keeping the inflation rate stable at
around 2 percent. Therefore, when I hear the kind of arguments in Japan that we do not
need to aim at 2 percent inflation, I wonder whether people have already forgotten the very
important lesson learned from the hard times after the global financial crisis, as nearly a
decade has passed since then.
The Bank will pursue powerful monetary easing with the aim of achieving the price
stability target of 2 percent at the earliest possible time.
Conclusion
In conclusion, let me touch on the economy of Aomori Prefecture. The prefecture can be
characterized by prosperous agricultural, forestry, and fishery industries with rich nature, as
well as a variety of natural, historical, and cultural tourist attractions.
In the agricultural, forestry, and fishery industries, the prefecture is Japan's largest producer
of many items such as apples and garlic, with a large-scale and modern business project
expanding in the livestock industry in recent years. Despite nationwide sluggishness in
these industries, Aomori Prefecture's production is on the rise, at a growth level that is one
of the highest among all prefectures. The industries have been taking initiatives recently to
raise the value added through enhancement of the products' brand images as well as the
"sixth industrialization," and proceeding with overseas expansion of their businesses.
no
Steady progress has been made already; "Seiten hekireki" is gaining attention as a new
rice brand and "Kuro ninniku," or black garlic, has been increasingly sold in Europe and the
United States.
In the tourist industry, the prefecture is endowed with various attractions such as the natural
environment and its historical and cultural heritage: the Shirakami Mountains, which are
registered as a world heritage site; Hirosaki Castle, which is also famous for cherry
blossoms; Jomon period archeological sites; and the Nebuta Festival. On top of these,
taking advantage of the launch of the Hokkaido Shinkansen last year, the prefecture has
been enhancing tourism promotion in cooperation with the Hakodate area. It also has been
making great efforts in boosting inbound demand. With these initiatives, the recent growth
rate in the number of accommodated inbound guests has marked one of the highest figures
nationwide. The number of cruise ships calling at ports in the prefecture is higher than that
in any other prefectures in the Tohoku region, and more foreign visitors are expected as
regular international flights have been in operation at Aomori Airport since this May for the
first time in 22 years.
I believe that people in Aomori Prefecture are taking on new challenges, making full use of
these rich resources. I expect the Bank's Aomori Branch to support these initiatives through
analysis of the local economy and communication with the public. In closing, let me
express my strong hopes for the further development of Aomori Prefecture's economy and
convey my best regards.
Thank you very much for your attention.
Japan's Economy and Monetary Policy
Speech at a Meeting with Business Leaders in Aomori
June 22, 2017
Kikuo Iwata
Deputy Governor of the Bank of Japan
Chart 1
Overseas Economies
Manufacturing PMI
s.a., DI
60
Global economy
Advanced economies
Emerging and commodity-exporting economies
55
50
45
CY 10 11 12 13 14 15 16 17
Note: Figures for the global economy are the J.P.Morgan Global Manufacturing PMI. Figures for advanced economies as well as emerging and
Notes:commodity-exporting economies are calculated as the weighted averages of the Manufacturing PMI using PPP-adjusted GDP shares of
Notes:world total GDP from the IMF as weights. Advanced economies consist of the United States, the euro area, the United Kingdom, and Japan.
Emerging and commodity-exporting economies consist of 17 countries and regions, including China, South Korea, Taiwan, Russia, and Brazil.
Sources: IMF; IHS Markit (© and database right IHS Markit Ltd 2017. All rights reserved.); Haver. 1
Chart 2
World Economic Outlook Released by the IMF
Projections for Major Economies
(as of April 2017)
y/y % chg.
2017 2018
2015 2016
[Projections] [Projections]
World 3.4 3.1 3.5 3.6
Advanced Economies 2.1 1.7 2.0 2.0
United States 2.6 1.6 2.3 2.5
Euro Area 2.0 1.7 1.7 1.6
United Kingdom 2.2 1.8 2.0 1.5
Emerging Market and
4.2 4.1 4.5 4.8
Developing Economies
China 6.9 6.7 6.6 6.2
ASEAN5 4.8 4.9 5.0 5.2
Chart 3
Exports, Industrial Production, and Corporate Profits
Corporate Profits
Exports and Industrial Production
s.a., %
s.a.
110 7
Real exports (CY 2015=100)
108
Ratio of current profits to sales
6
(all industries and enterprises)
106
Industrial production (CY 2010=100)
5
104
102
4
100
3
98
96
2
94
1
92
0
90
CY 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17
CY
Chart 4
Business Conditions by Region (Tankan)
DI ("favorable" - "unfavorable"), % points
30
20
"Favorable"
10
"Unfavorable"
0
-10
-20
-30
Range of responses by region
Tohoku region
-40
Japan (all industries and enterprises)
-50
-60
CY 05 06 07 08 09 10 11 12 13 14 15 16 17
Chart 5
Business Conditions by Size of Enterprise (Tankan)
DI ("favorable" - "unfavorable"), % points
60
Large enterprises
Medium-sized enterprises
40
Small enterprises
"Favorable"
20
"Unfavorable"
0
-20
-40
-60
CY 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17
Chart 6
Labor Market Conditions
Unemployment Rate and Active Job Openings-to-Applicants Ratio
s.a., times
s.a., %
6 1.5
Unemployment rate (left scale) Active job openings-to-applicants ratio (right scale)
1.4
1.3
5 1.2
1.1
1.0
4 0.9
0.8
0.7
3 0.6
0.5
0.4
2 0.3
05 06 07 08 09 10 11 12 13 14 15 16 17
CY
6
Sources: Ministry of Internal Affairs and Communications; Ministry of Health, Labour and Welfare.
Chart 7
Nominal Wages
Scheduled Cash Earnings
Hourly Cash Earnings
(Full-Time Employees)
y/y % chg.
y/y % chg.
2.0
3.0
Composition effect, etc.
2.5
Establishments with 100 or more
1.5
employees
2.0
Establishments with less than 100
employees
1.5
Total (5 or more employees)
1.0
1.0
0.5
0.5
0.0
0.0
-0.5
Hourly cash earnings
-1.0
-0.5
Hourly scheduled cash earnings
-1.5
(part-time employees)
-1.0
-2.0
CY 95 97 99 01 03 05 07 09 11 13 15
10 11 12 13 14 15 16 17
Note: For hourly cash earnings, Q1 = March-May, Q2 = June-August, Q3 = September-November, Q4 = December-February.
Figures for 2017/Q1 are those of March-April averages.
7
Source: Ministry of Health, Labour and Welfare.
Chart 8
Consumer Prices
y/y % chg.
2
Introduction of QQE
(April 2013)
1
0
-1 CPI (all items less fresh food and energy)
CPI (all items less fresh food)
-2
CY 10 11 12 13 14 15 16 17
Note: Figures for the CPI are adjusted to exclude the estimated effects of changes in the consumption tax rate.
Source: Ministry of Internal Affairs and Communications. 8
Chart 9
Consumer Prices and Inflation Expectations
in Advanced Economies
Inflation Expectations
Consumer Prices
(Long-term)
(All Items)
% %
3
3
2
2
1
0
1
Beginning of a
downtrend in
Japan
Japan
crude oil prices
-1
United States
United States
Euro area
Euro area
0
-2
10 11 12 13 14 15 16 17
10 11 12 13 14 15 16 17 CY
CY
Notes: 1. Figures for Japan's CPI (all items) are adjusted to exclude the estimated effects of changes in the consumption tax rate.
2. Figures for inflation expectations (long-term) are 6-10 years ahead expectations in the "Consensus Forecasts."
9
Sources: Ministry of Internal Affairs and Communications; BEA; Eurostat; Consensus Economics Inc., "Consensus Forecasts."
QQE with Yield Curve Control
Inflation-Overshooting Commitment
Yield Curve Control
%
Inflation Rate
1.2
Recent shape of
1.0
JGB yield curve
0.8
Short-term Target level of
policy interest the long-term
0.6
rate interest rate
2%
"minus 0.1 "around zero
percent" percent"
0.4
0.2
0.0
-0.2
-0.4
Nominal and Real Interest Rates (the Most Recent)
(1) Short-term (overnight)
Inflation Expectations
Real Interest Rates
Nominal Interest Rates
(≒Observed Inflation Rates)
%
%
%
3 3
3
2 2
2
1
1
1
0 0
0
-1 -1
-1
-2 -2
-2
Japan United States Japan United States
Japan United States
(2) Long-term (10-year)
Inflation Expectations Real Interest Rates
Nominal Interest Rates
%
%
%
3
3
3
2 2
2
1 1
1
0
0 0
-1
-1
-1
-2 -2
-2
Japan United States Japan United States
Japan United States
Notes: 1. Figures are those of April 2017. Figures for observed inflation rates are the CPI (all items less fresh food and energy) for Japan and
the PCE deflator (all items less food and energy) for the United States.
2. Figures for long-term inflation expectations are 6-10 years ahead expectations in the "Consensus Forecasts."
Sources: Ministry of Internal Affairs and Communications; Consensus Economics Inc., "Consensus Forecasts"; Bloomberg; BEA.
Short-term Interest Rates (O/N) after the Global Financial Crisis
Inflation Expectations
Real Interest Rates
Nominal Interest Rates
(≒Observed Inflation Rates)
% %
%
4
4
6
Japan
Japan
Japan
3
3
5 United States
United States
United States
Bankruptcy of
2
2
4
Lehman Brothers
1
1
3
0
0
2
-1
-1
1
-2 -2
0
-3
-3
-1
CY
07 08 09 10 11 12 13 14 15 16 17
CY 07 08 09 10 11 12 13 14 15 16 17
CY 07 08 09 10 11 12 13 14 15 16 17
Note: Figures for observed inflation rates are the CPI (all items less fresh food and energy, adjusted to exclude the estimated effects of changes in the
consumption tax rate) for Japan and the PCE deflator (all items less food and energy) for the United States.
Sources: Bloomberg; Ministry of Internal Affairs and Communications; BEA. 12
Long-term Interest Rates (10-Year) after the Global Financial Crisis
Real Interest Rates
Nominal Interest Rates Inflation Expectations
% %
%
5 4
6
Japan
Japan
Bankruptcy of
4
5 3
Lehman Brothers
United States
United States
Japan
3
4 2
United States
3 2 1
2 1
0
1 0
-1
0 -1
-2
-1 -2
-3
CY 07 08 09 10 11 12 13 14 15 16 17 CY 07 08 09 10 11 12 13 14 15 16 17
CY 07 08 09 10 11 12 13 14 15 16 17
Figures for inflation expectations are 6-10 years ahead expectations in the "Consensus Forecasts."
SNote: Bl b C E i I "C F t " 13
Developments in Real GDP after the Global Financial Crisis
s.a., 2007/Q1=100
106
104
Bankruptcy of Lehman Brothers
102
100
98
96
Japan
94
United States
92
Euro area
90
CY 07 08 09 10 11
14
Sources: Cabinet Office; BEA; Eurostat.