september 30, 2016 bank of japan opening remarks at the 3rd bank of canada and bank of japan joint workshop haruhiko kuroda governor of the bank of japan i am pleased to welcome all our distinguished guests to the 3rd bank of canada and bank of japan joint workshop. in particular, it is our great honor to have the presence of professor gianluca benigno, professor marvin goodfriend, and professor lawrence h. summers as speakers. last but not least, representing the bank of japan, i would also like to thank the bank of canada team headed by mr. gregory bauer and mr. rhys mendes for their participation and cooperation right from the organizing phase of the workshop. at the monetary policy meeting held last week, the bank of japan decided to introduce " quantitative and qualitative monetary easing ( qqe ) with yield curve control " by strengthening the previous policy framework with a view to achieving the price stability target of 2 percent at the earliest possible time. the new policy framework consists of two major components : the first is " yield curve control " in which the bank will control short - term and long - term interest rates ; and the second is an " inflation - overshooting commitment " in which the bank commits itself to expanding the monetary base until the year - on - year rate of increase in the observed consumer price index exceeds the price stability target of 2 percent and stays above the target in a stable manner. in the run - up to the new decision, the bank conducted a comprehensive assessment of the developments in economic activity and prices under " qqe " and " qqe with a negative interest rate. " the assessment includes a number of solid econometric analyses, showing the importance of interaction between policy analysis and policy action, as a basis for better policy making. if you look at the bank of canada web site, it is saying, " the governor of a country's central bank must have a thorough understanding of financial markets and the economy and possess wide experience in international finance. " while i greatly respect the high standard set by canadian people, we recognize that even today central banks are being faced with a number of challenges in fulfilling their given mandates and central bankers are, admittedly, not omnipotent. it is why we hold and cherish opportunities like today's workshop to meet for discussion and to exchange views and wisdom with each other. today, we will discuss " challenges to central bank policies for price stability and financial stability " in

par with other revenues. jeffrey sachs and andrew warner ( 1995 ) : “ natural resource abundance and economic growth ”, nber working paper 5398. halvor mehlum, karl o. moene and ragnar torvik ( 2006 ) : “ institutions and the resource curse ”, the economic journal 116, pp. 1 – 20. see for example report no. 25 ( 1973 – 74 ) to the storting : “ petroleumsvirksomhetens plass i det norske samfunn ” [ the role of petroleum activity in norwegian society ]. nou ( official norwegian report ) 1983 : 27 “ petroleumsvirksomhetens framtid. det framtidige omfanget av petroleumsvirksomheten pa norsk sokkel ” [ the future of petroleum activity. the future scale of offshore petroleum activity in norway ]. the committee had limited confidence in the government ’ s ability to save : the committee stated the following concerning a savings fund : “ it is up to the political authorities to determine whether such a fund construction designed to avoid a future decline in income is realistic. the committee chooses not to build on such an assumption. ” the notion of a sovereign oil fund matured through the 1980s. the government, under the premiership of kare willoch, called for the establishment of such a fund in the long - term programme presented in spring 1986, and the act on the government petroleum fund was passed in 1990. the main rules are : first : the totality of government petroleum revenues is transferred to the fund. second : the fund is integrated into central government budgets and accounts. the non - oil deficit is covered by an annual transfer from the fund. the government cannot borrow to finance current expenditure as long as there is capital in the fund. third : the capital in the fund can only be used for domestic spending via general budget transfers, and not for earmarked transfers. fourth : the fund ’ s capital must be invested abroad. when the act was enforced, the norwegian economy was in a deep downturn, with high unemployment and government budget deficits. projections also indicated that offshore production would pass the peak in the early 1990s 5. those working on the bill at the ministry of finance at that time were probably in doubt as to whether any petroleum revenues would ever be saved, and perhaps they also questioned the utility of such a fund. initially, the fund structure was merely an exercise in accounting. government petroleum revenues