the covid - 19 pandemic : evidence from surveys ], economic review 73, no. 2 ( 2022 ) : pp. 133 - 59 ; uesugi, i., chusho kigyo kin'yu no keizaigaku : kin'yu kikan no yakuwari ; seifu no yakuwari [ economics of small business finance : the role of financial institutions ; the role of the government ] ( tokyo : nikkei publishing, 2022 ), pp. 43 - 47. 8 moreover, recent studies have shown that small and medium - sized firms with no debt, which do not rely on bank loans, have a rather small appetite for capital investment. see uesugi, chusho kigyo kin'yu no keizaigaku, pp. 35 - 38. would need to pursue policies to support the economy by further lowering market interest rates below the natural rate of interest. 9 c. revisiting the importance of inflation targeting earlier, i mentioned that the bank adopted the price stability target of 2 percent in 2013. here, i would like to explain the importance of inflation targeting once again. currently, the most important mandate for many central banks is to maintain price stability. inflation targeting clearly defines this mandate in quantitative terms, and many central banks around the world have adopted such targeting ( chart 15 ). theoretically, one could argue that other indicators, such as the nominal gdp growth rate, could be set as a policy objective. however, it is the inflation rate that most naturally relates to the mandate of maintaining price stability. 10 major central banks, such as the federal reserve and the ecb, also target a 2 percent inflation rate. ambiguity in this inflation targeting would make the objective of monetary policy vague, and therefore could undermine the transparency of monetary policy and its effectiveness. 11 this applies to dealing with not only deflation but also inflation. iii. recent and future economic activity in shizuoka prefecture before closing my speech, i would like to talk about the economy of shizuoka prefecture. the prefecture's economy is currently picking up as a trend, despite being affected by in his paper published in 1998, which advocated at an early stage for japan having more aggressive monetary easing, professor krugman assumes that japan's natural rate of interest is falling due to a declining birthrate. the paper suggests that macroeconomic policies are necessary especially when there are structural problems. see krugman, p. r.

of shimizu, an international hub port, is laying the groundwork to make its logistics more efficient and highly competitive. the prefecture is also taking steps to promote exports of food, including products from other prefectures that are now easier to transport after the full opening of the chubu odan expressway in 2021. in addition, as a network of roads takes shape along the izu peninsula, the prefecture is dedicating its efforts to promoting tourism and creating a healthcare industry centered on the peninsula's hot springs. such initiatives are drawing notice since they are utilizing accumulated capital as a driving force to spark growth in exports and capture inbound tourism demand. the second set of initiatives involves the creation of new industries - - that is, efforts to harness knowledge. 12 mainly in the western part of the prefecture, where the automobile industry is concentrated, industry, academic institutions, and local government agencies are working together to address major changes in the environment, such as advancement of so - called case technologies. 13 while tracking the technological demands of next - generation vehicles, this region is providing comprehensive support in areas ranging from development and design to manufacturing and sales, so that the relevant small and medium - sized firms can cultivate new businesses. moreover, besides the efforts made by local governments, it is impressive that a growing number of regional financial institutions in the prefecture are fostering and supporting entrepreneurs and venture startups by leveraging their respective infrastructures, networks, and knowledge. the third set of initiatives involves creating communities that can attract people. earlier, i noted that economic growth is possible even amid a declining population, but still, curbing the decline is a critical challenge in terms of encouraging technological innovation and business startups. to this end, it is essential to develop communities that provide comfortable places to work and live in. efforts made by nagaizumi town and fukuroi city are helpful guides here. they rank as the top two of the four municipalities in the prefecture that had positive rates of population change over the latest census period of five years. what both have in common is that they have created diverse work opportunities through proactive efforts to invite firms, while offering substantial fiscal support, including for child - rearing and the development of educational environments. with relocating or returning to regional areas drawing attention after the outbreak of the pandemic, my hope is that these efforts to create attractive living environments will lead to further vitalization of the region. as for the importance of harnessing knowledge, some state that the