case, the pace of growth in the u. s. economy is likely to remain modest reflecting the limited room for further fiscal and monetary stimulus and the lingering adjustment pressure on households ’ and financial institutions ’ excessive debts. it is important to bear in mind that, despite the deteriorating situation in europe, the market ’ s view on the outlook for overseas economies has not yet become too pessimistic, reflecting the improved outlook for the u. s economy. therefore, attention should be paid to the possibility that if the outlook for the u. s. economy becomes cautious again, disruptions in global financial markets could spread rapidly. as for emerging economies, the pace of growth has decelerated somewhat due to the effects of monetary tightening and the decline in exports reflecting the slowdown in advanced economies. in fact, in china, the driving force of the global economy, tax revenues, the amount of electric power, and imports – indicators that are considered to be fairly reliable – have continued to be weak from around the middle of this year compared with the previous trend of high growth. if european financial institutions reduce their assets more as the sovereign debt problem deteriorates further, lending to emerging countries could be restrained and trade financing affected. on the other hand, it is encouraging that the room left for monetary easing in emerging countries including china has increased, reflecting the recent pause in the rise in consumer prices, particularly food prices. as i have stated, there are both positive and negative factors for emerging economies. attention should continue to be paid to whether the economies can make a soft - landing by realizing price stability and growth at the same time. before i turn to the next topic, let me point out that recently two significant changes are proceeding, albeit gradually, in the global economy. the first change includes the aging of the population profile and a decrease in working population in advanced countries, and an increasing mismatch between job seekers and job offers. this increasing mismatch reflects not only the change in the skills required of workers due to the rising importance of information technology in economic activity. it also reflects the fact that inter - regional labor mobility has become less smooth than before as workers experience increasing difficulty in buying and selling their homes due to the sharp decline in housing prices after the collapse of the housing bubble. these changes in the labor markets could exert downward pressure on the growth potential of advanced countries, and therefore delay adjustments in the excessive debts of u. s. households and european governments. if bis central bankers

target, producing a cumulative rise of 1. 5 percent. the bank of japan, however, has made a commitment, unprecedented in the history of central banks, to continue with the quantitative easing policy until the year - on - year rate of change in the cpi registers zero percent or higher on a sustainable basis. the bank has made this commitment to prevent the economy from once again falling into a downward spiral in which falling prices and declining economic activity could be negatively reinforcing. this policy framework is expected to more strongly support private - sector activity as the economy recovers. explaining this in a little more detail, the policy commitment to continue with the quantitative easing policy ensures that, even during phases of economic recovery, expectations of short - term interest rates remain stable as long as prices themselves are not rising. in terms of the current situation, this has allowed firms to continue to enjoy low funding costs. firms are better able to take advantage of these lower interest rates to carry out forward - looking investment since they have been highly successful in their efforts to raise profitability. when firms are more confident about the future, a financial environment such as this makes it easy for them to raise necessary funds and execute their spending plans more aggressively. yet when pursuing an unprecedented quantitative easing policy such as this, it does not do to be complacent about " excessive movements " - that is, phenomena which are not consistent with the sustainable growth of the economy. in the united states, low interest rates over a protracted period have generated remarkably high levels of liquidity. there is now discussion over whether this may be contributing to signs of potentially excessive risk taking, which seem to be reflected in relatively narrow credit spreads and the speculative demand becoming apparent in the housing market. reduced credit spreads are a worldwide phenomenon, which is becoming slightly more marked in japan than in other economies, and we cannot ignore the possibility that market participants have begun to take less notice of risk. similarly, attention now needs to be paid to whether or not low long - term interest rates are consistent with the likely duration of accommodative monetary policy. it goes without saying that such matters will need to be taken duly into account in conducting monetary policy in the future. vii. firms'positive commitments and their adaptability to change even if some parts of the economy are moving forward aggressively, this is not to say that the whole economy is characterized by similar vigor. some firms are starting to adopt a more positive stance as evident in the increase in business