idea about the new direction of their business. progress is also reflected in the business fixed investment of various industries. namely, investment has been increasing in capital - and production - goods related sectors, where high growth in production has been recorded. there has also been a rapid expansion of investment in a new industry of mobile telecommunications. business fixed investment for development of new products and new businesses also seems to be increasing gradually. with regard to employment, structural adjustment pressures are persistent in some indicators such as the high unemployment rate. however, based on the most recent changes in employment indicators and the microeconomic information on firms, labor market conditions are seen to be improving gradually, indicating steady progress in industrial restructuring. for example, recent numbers of new job offers are significantly higher than those in the previous year. business surveys indicate that an increasing number of firms plan, for the first time in many years, to increase the number of new graduates hired in the next fiscal year. results of the november tankan also indicate that more than half of the smaller firms surveyed feel that they are shorthanded. furthermore, labor market conditions in each sector indicate that employment has decreased significantly in sectors where imports have been making inroads - - such as the electrical machinery and textiles industries - - while employment has increased in new sectors such as telecommunications. these changes indicate a gradual shift of labor between sectors. in sum, although pressures for the structural adjustment of industries remain, it can be said that structural adjustment has progressed significantly as reflected in the recent recovery in business fixed investment and employment. d. balance - sheet adjustment the third issue to be discussed is that of balance - sheet adjustment. there are two aspects to this issue : the improvement of the financial condition of firms and the disposal of nonperforming loans of financial institutions. with regard to the balance - sheet adjustment of japanese firms, there have been serious efforts by firms to reduce their liabilities since the bursting of the economic “ bubble. ” despite these efforts, the mismatch between assets and liabilities expanded in many sectors until 1994 or 1995 due to the continued decline in real estate prices. while the decline in asset prices has slowed since 1995, liabilities have decreased owing to the recovery in corporate profits which followed firms ’ restructuring efforts and lower interest rates. several indicators, such as the ratio of long - term debts to assets at market value, reveal that balance - sheet adjustment pressures are persistent. in particular, small and medium - sized firms still need to make substantial efforts to

choice of the appropriate model applies. this question remains yet to be explored in full depth. we know that increasing attention is being 2 / 3 bis central bankers'speeches paid to the distributional effects of economic and other public policies. i would like to reiterate that, under such circumstances, monetary policy is not a tool that is well suited for dealing with inequality or polarization and that central banks should remain focused on the aggregate implications of their own policy decisions. at the same time, however, this does not mean that central banks are allowed to ignore the distributional effects of monetary policy, especially if the distributional effects have an aggregate impact. with this aim, central banks should be, and in fact are, open to learning about heterogeneous agent macroeconomics. these days, much progress has been made on this front in computational economics. central banks are keenly following the technical progress and will keep abreast with the pioneers on this front as well. iii. the way ahead we are now about to start the 23rd boj - imes conference, which has a history of more than a quarter - century. this year ’ s conference is organized so that discussions can revolve around the three major topics that i mentioned in these opening remarks. nearly ten years ago, professor maurice obstfeld, currently chief economist of the imf and then - honorary adviser to imes, in this room identified the boj - imes conference as “ a venue in which abstract monetary theory and practical policy questions can comfortably be discussed in full depth and side by side. ” i regard his remark as a great compliment to this conference. i am convinced that this year ’ s conference will produce further insights into more effective central bank policymaking, in a same manner as previous conferences. thank you. 1 bank of japan, “ comprehensive assessment : developments in economic activity and prices as well as policy effects since the introduction of quantitative and qualitative monetary easing ( qqe ), ” 2016. nishino, kousuke, hiroki yamamoto, jun kitahara, and takashi nagahata, “ supplementary paper series for the ‘ comprehensive assessment ’ ( 1 ) : developments in inflation expectations over the three years since the introduction of quantitative and qualitative monetary easing ( qqe ), ” bank of japan review, no. 2016 - e - 13, 2016. 2 fuhrer, jeffrey, “ the role of expectations in inflation dynamics, " international