- term interest rates would not necessarily rise, so that the spread between short - term and long - term interest rates might actually decline. this is currently happening in the united states and has happened in japan since 2006. 9 the reason many market participants think that the yield curve will steepen and hence the term spread will increase when the bank raises interest rates is probably that they expect the opposite to happen of the flattening of the yield curve seen at the time the bank introduced the negative interest rate policy on january 29, 2016. however, looking at the facts, we find that the yield curve often tends to flatten when monetary policy is tightened. chart 3 shows the uncollateralized overnight call rate and long - term interest rates - - represented by 10 - year japanese government bond yields - - from 2000 to the present. the chart shows that when policy was tightened on august 11, 2000 ( termination of the zero interest rate policy ; for instance, reuters reported that the federal reserve bank of st. louis president james bullard said : " we are at some risk of a yield curve inversion, later this year, early 2019. " see gertrude chavez - dreyfuss, " fed's bullard says u. s. yield curve might invert by early 2019, " reuters, may 15, 2018, https : / / www. reuters. com / article / usa - fed - bullard - yieldcurve / update - 1 - feds - bullard - says - us - yield - curve - might - invert - by - early - 2019 - idusl2n1sl10u. this, naturally, is not certain to happen, but has happened before. overnight call rate of around 0. 25 percent set as the guideline for money market operations ), on july 14, 2006 ( termination of zero interest rates ; policy rate hike from 0 percent to around 0. 25 percent ), and on february 21, 2007 ( policy rate hike from around 0. 25 percent to around 0. 5 percent ), the yield curve flattened, that is, the term spread declined. the exception is the period around the time when the bank reverted from its policy of quantitative easing to conventional interest rate policy on march 9, 2006, shifting its operating target of money market operations from the outstanding balance of current accounts at the bank at around 30 - 35 trillion yen to the uncollateralized overnight call rate to remain at effectively 0 percent ; following the

borne out in practice. productivity in both italy and france is higher than in japan, but the unemployment rate in those two countries is 11. 3 percent and 9. 4 percent, respectively. 4 however, when the unemployment rate is high, there are people who cannot work although they want to, which is unfortunate. obviously, a better situation is one where the unemployment rate is low and all the people who want to work can work. therefore, i thought it would be useful to look at real purchasing power parity gdp per working - age person. this should reduce the distortion introduced by focusing on labor productivity, since this indicator is higher when those who want to work do work, and lower when they do not work. in this context, it is worth quoting dr. osamu shimomura, who was the brains behind the period of high economic growth achieved under prime minister hayato ikeda. in 1968, exactly 50 years ago, he said : " why are we making such effort and putting up with such hardship to pursue economic growth? more than anything, we want to derive satisfaction from life and work. and isn't the greatest satisfaction in life being able to fully demonstrate one's abilities? we should pursue a society that provides such opportunities to all citizens. if we compare society today and society a hundred years ago, isn't the fundamental difference that, today, finally, a large number of citizens are gradually being provided with the opportunity to take advantage of their talents in one way or another? " 5 i am not saying that simply raising the employment rate is the same as the ideals expressed by dr. shimomura. the figures are for 2017 and are taken from the world economic outlook database april 2018, available on the website of the international monetary fund ( imf ) : https : / / www. imf. org / external / pubs / ft / weo / 2018 / 01 / weodata / index. aspx. kamikubo satoshi, hyoden, nihon no keizai shiso, shimomura osamu,'nihon keizaigaku'no jissensha ( tokyo : nihon keizai hyouronsha ltd., 2008 ), 227. however, i believe that providing people with the opportunity to work is the starting point for people to be able to fully demonstrate their abilities. this can also be said, for example, with regard to women's entry into the labor market.