adrian - shin 11, has also been devoted recently to the debt and leverage ratios of financial intermediaries and to their variation over the business cycle. in answering to the question of which financial frictions matter, adrian, colla and shin ( 2012 ) 12 point to the importance of including in a model with financial - real feedbacks the pro - cyclical leverage cycle and the co - existence of loans and bonds that tend to be substitutes in a recession even if spreads on both tend to increase. geanakoplos has shown that variations in leverage have a huge impact on asset prices potentially contributing to economic bubbles and busts. 13 leverage cycles have only recently started being incorporated in macro - financial models. one prominent example is the model see caccioli, f., j. d. farmer, n. foti and d. rockmore ( 2012 ), “ stability of the austrian banking system ”, unpublished paper. see gertler, m. and n. kiyotaki ( 2010 ), “ financial intermediation and credit policy in business cycle analysis ”, in b. friedman and m. woodford ( eds. ), handbook of monetary economics, edition 1, volume 3, october. see goodhart, c. a. e., a. kashyap, d. p. tsomocos, and a. p. vardoulakis ( 2012 ), “ financial regulation in general equilibrium ”, nber working paper no. 17909. see adrian, t. and h. s. shin ( 2010 ), “ financial intermediaries and monetary economics ”, in b. friedman and m. woodford ( eds. ), handbook of monetary economics, edition 1, volume 3, october. adrian, t., colla, p. and shin, h. s. ( 2012 ) “ which financial frictions? parsing the evidence from the financial crisis of 2007 – 09 ” federal reserve bank of new york, staff reports, revised version march 2012. see geanakoplos, j. ( 2009 ), “ the leverage cycle ”, in d. acemoglu, k. rogoff and m. woodford ( eds. ), nber macroeconomics annual, vol. 24. bis central bankers ’ speeches by brunnermeier and sannikov which includes time - varying margin requirements set by financial intermediaries and thus exacerbates the impact of asset prices

. 5 2. 0 1. 5 y / y % chg. mobile phone charges effects of the " go to travel " campaign effects of the consumption tax hike and free education policies energy excluding the above factors cpi ( less fresh food ) 1. 0 0. 5 0. 0 - 0. 5 - 1. 0 - 1. 5 - 2. 0 cy 17 notes : 1. figures for energy consist of those for petroleum products, electricity, as well as manufactured and piped gas charges. 2. figures for the " effects of the consumption tax hike and free education policies " from april 2020 onward are bank staff estimates and include the effects of measures such as free higher education introduced in april 2020. source : ministry of internal affairs and communications. chart 9 capital stock cycles and expected growth rates business fixed investment, y / y % chg. investment - capital stock ratio at the end of fy 2020 fy 2021 - 5 1. 5 % 1 % 0. 5 % 0 % - 10 expected growth rate : - 2 % - 1 % - 15 9. 5 10. 0 10. 5 11. 0 11. 5 12. 0 12. 5 13. 0 investment - capital stock ratio at the end of the previous fiscal year, % note : each broken line represents the combination of the rate of change in business fixed investment and the investment - capital stock ratio at a certain expected growth rate. the figure for fiscal 2021 is the 2021 / q2 - q4 average. source : cabinet office. chart 10 output and input prices ( tankan ) manufacturing nonmanufacturing di ( " rise " - " fall " ), % points - 20 - 20 - 40 - 40 - 60 cy 74 - 60 cy 74 di ( " rise " - " fall " ), % points note : figures are for all enterprises. source : bank of japan. chart 11 monetary policy guideline for market operations under yield curve control the bank's measures in response to covid - 19 short - term policy interest rate : applying a negative interest rate of minus 0. 1 percent to the policy - rate balances in current accounts held by financial institutions at the bank supporting corporate financing long - term interest rate : purchasing a necessary amount of jgbs without setting an upper limit so that 10 - year jgb yields will remain at around zero percent special funds - supplying operations to facilitate financing in response to the novel coronavirus ( covid - 19 ) ( mainly targeting small and medium