haruhiko kuroda : monetary policy - lessons learned and challenges ahead opening remarks by mr haruhiko kuroda, governor of the bank of japan, at the 2017 boj - imes conference, hosted by the institute for monetary and economic studies, bank of japan, tokyo, 24 may2017. * * * i. introduction good morning. i am honored to welcome such distinguished guests to the 23rd boj - imes conference. on behalf of the conference organizers, i thank all the guests in this room, in particular those who travelled a long distance to participate in this one - and - a - half - day conference in tokyo. this year ’ s conference is titled “ monetary policy : lessons learned and challenges ahead. ” after my remarks, mr. ben bernanke, former u. s. fed chair, will deliver the mayekawa lecture based on his experience as an academic researcher and a monetary policy maker. in the afternoon, professor mark gertler, our honorary adviser to imes, will give the keynote speech. tomorrow, a policy panel session will conclude the program with three panelists, mr. charles evans from the chicago fed, mr. frank smets from the european central bank, and my colleague at the bank of japan, hiroshi nakaso. the panel session will be moderated by professor marvin goodfriend, the other honorary adviser to imes. in addition, i am pleased to have three leading economists to present their papers, addressing timely and important issues at the frontier of monetary economics and monetary policy making. i am confident that we will all learn a lot during the conference. ii. three research questions at the top of the agenda in my opening remarks, i would just like to deliver a sneak peek of this year ’ s conference by pointing out three major research topics on our agenda. a. inflation and its expectations dynamics since the introduction of “ quantitative and qualitative monetary easing ( qqe ) ” in april 2013, raising inflation expectations to anchor them at the price stability target of 2 percent has been a crucial element of the bank of japan ’ s monetary policy management. in september 2016, the bank published a comprehensive assessment of the policy effects of qqe and other policy measures, including the negative interest rate policy. as companion papers of the comprehensive assessment, the bank of japan also published several empirical studies exploring the characteristics of inflation expectations in japan and comparing them with those in other advanced economies. 1 those studies

japan ’ s exports first, i would like to touch on overseas economies. overseas economies – mainly advanced economies – have been recovering, albeit with a lackluster performance still seen in part of emerging economies. overseas economies weakened rather substantially in the januarymarch quarter of 2015, particularly in the united states and china, but they are expected to continue recovering moderately, mainly in the advanced economies, and the positive effects of this are likely to gradually spread to the emerging economies. this view is shared among international organizations such as the international monetary fund ( imf ). according to the world economic outlook ( weo ) update published in july by the imf, global economic growth in 2015 has been revised downward to 3. 3 percent, due to its weakening in the january - march quarter, but is projected to accelerate moderately and register 3. 8 percent in 2016 ( chart 1 ). bis central bankers ’ speeches looking closely at the developments in overseas economies by region, the u. s. economy has continued to recover solidly, assisted by household spending, although adjustments have been seen in the industrial production sector, mainly on the back of the decline in crude oil prices and the appreciation of the u. s. dollar. in the january - march quarter of 2015, the economy exhibited slightly negative growth due to transitory factors such as the effects of the severe winter weather and the strikes at west coast ports ( chart 2 ). nevertheless, the growth momentum of the economy has recently recovered from the temporary stall in winter against the backdrop of the continued favorable employment and income situation. from spring, private consumption clearly has rebounded, as seen mainly in improvements in retail and automobile sales. going forward, there will be sectors that are affected by the decline in crude oil prices and the appreciation of the u. s. dollar, but the u. s. economy is likely to continue to see growth led mainly by private demand, with robust household spending assisted by the favorable employment and income situation. regarding monetary policy, the next step toward normalization will come into sight ; namely, raising the target range for the federal funds rate. this seems to suggest that the u. s. economy has recovered to a considerable level. however, it is necessary to monitor with due attention whether markets, especially those in emerging economies, will be affected unexpectedly through a reversal of the global flow of funds as the federal funds rate – which has been at the zero lower bound after the global financial crisis – will be raised. next, i will