lost decades and consider potential lessons for the current economic situation in italy and europe. naturally, there are many other aspects in which japan and italy can learn from each other, not only with regard to finance and the economy. looking at the oecd ’ s better life index, which measures happiness across countries based on various indicators such as education and the living environment, both japan and italy rank in the middle of oecd countries ; interestingly, however, individual indicators suggest that whereas japan ranks favorably in terms of labor market conditions and education, italy ranks highly in terms of work - life balance and health ( chart 11 ). it is said that japan became widely known in europe when the venetian - born merchant marco polo in his 13th century travel diary introduced japan as “ zipangu, the land of gold. ” since then, as countries with a long history and long traditions, italy and japan have continued to learn from each other. let me close this speech by saying that although our two countries are currently facing a number of similar problems, i am convinced that by overcoming these problems through cooperation, our bonds will continue to grow over the next 150 years and bring a golden future for our two countries, even without the zipangu ’ s gold. thank you. bis central bankers ’ speeches bis central bankers ’ speeches bis central bankers ’ speeches bis central bankers ’ speeches bis central bankers ’ speeches bis central bankers ’ speeches bis central bankers ’ speeches

2009 ). that tendency becomes more evident, by comparing real gdp growth per man - hour. see hayashi and prescott ( 2002 ). the latest figure for the japanese cpi is july 2010. the meantime, long - term inflation expectations remained generally unchanged, and anchored around 1 percent ( chart 9 ). japan ’ s deflation since the second half of the 1990s is a rare experience in the post - war advanced economies, but the scale of the price decline is far smaller, compared to the period of the great depression when the united states registered a cpi decline of 24 percent in the 1930s ( chart 10 ). fifth, japan has experienced deflation not only in goods prices but also in services prices. compared with the united states, the difference in consumer price inflation is mainly attributed to services prices ( chart 11 ). that reflected flexible adjustments in nominal wages in japan, since the service sector is basically labor - intensive. sixth, japan has not experienced a deflationary spiral. more precisely, japan has not experienced the phenomenon after the burst of a bubble that a decline in prices induces a decline in economic activity, thereby leading to a further decline in prices. 12 instead, japan has experienced the longest recovery, just in duration without considering its strength, from 2002 under mild deflation ( chart 12 ). seventh and finally, the boj introduced various innovative policy measures ( chart 13 ). 13 the zero interest rate policy was first introduced by the boj in 1999. the “ quantitative easing policy, ” which set a target for money market operations on the outstanding amount of current account balances at the central bank and expanded such balances far above the required reserve levels, was also first introduced by the boj in 2001. the boj expanded its balance sheet size considerably. from 1995 when overnight interest rates fell down to virtually zero, the ratio of the boj ’ s balance sheet size to nominal gdp increased by more than 20 percentage points at its peak ( chart 14 ). that increase in the ratio for the boj is twice as large as that in the u. s. federal reserve ( fed ), the european central bank ( ecb ), and the bank of england ( boe ) in the recent crisis. in addition, the level of the ratio for the boj is still higher than that for the fed, the ecb, and the boe. as the target level of the current account balances was raised, the maturities of short - term funds - supplying