? while there are various estimates of the natural rate of interest, one way to look at it is to analyze developments in real interest rates. according to schmelzing ( 2020 ), global real interest rates have historically been on a downtrend ( chart 8 ). 23 second, except for the period of the two world wars, g < rwealth held true. although the decrease in g and the increase in rwealth both contributed to the gap between the two figures, the increase in rwealth is taken to have made a larger contribution. third, except for limited periods, rsafe < rwealth held true. the gap between the two is equivalent to risk premia, but this gap has been shrinking in recent years. under the bretton woods system, while rsafe was low, rwealth was high, driven upward by housing returns. however, rwealth has been declining in recent years. what are the implications for future monetary policy if the above relationships continue to hold? first, if the natural rate of interest continues on a declining trend, the challenge for central banks'monetary policy will continue to be how to lower real interest rates in an effective manner. faced with the zero lower bound ( zlb ) in an era of low inflation, central banks have taken steps to boost the effectiveness of their monetary policy. various proposals have been made to improve policy objectives ( chart 9 ). as a result, central banks have reaffirmed the importance of committing to the 2 percent inflation target. with regard to policy measures, the bank of japan, for example, has introduced such measures as quantitative easing, negative interest rates, diversification of asset purchasing, yield curve control, and forward guidance. the necessity for policy innovation to boost the effectiveness of monetary policy, both in terms of policy objectives and measures, may increase ; it certainly will not diminish. 24 due to data limitations, global real interest rates in this study were calculated from gdp - weighted nominal interest rates and inflation rates using available data for eight countries : italy, the netherlands, france, spain, the united kingdom, germany, the united states, and japan. since the study does not take into account the recent rise of china and emerging economies, the possibility of underestimation warrants attention. 24 bernanke ( 2022, pp. 330 - 65 ) elaborates on this point. second, if g < rwealth,

future, and such uncertainty is another crucial point that should be taken into consideration in the conduct of monetary policy. specifically, no one knows whether the flattened phillips curve will be a lasting phenomenon. in our outlook report published in april, we pointed out that the shape of the phillips curve may change along with changes in inflation expectations or labor cost restraint by firms. moreover, there is more than one hypothesis competing to explain the flattening of the phillips curve : for example, some point to decrease in firms'control over prices as a result of the stiff competition following deregulation and globalization, while others refer to the decreasing frequency of price revisions by firms in response to disinflation. inevitably, the outlook for the future differs depending on the hypothesis favored. actual economic developments always entail uncertainty, and not only for the reasons i just stated. just as with other economic challenges, a final resolution to the problems posed by inflation dynamics may be too much to ask for. yet in spite of this, central bankers must keep up with the cutting - edge ideas and insights of their time and reflect them in their policy management. as one such central banker, i am very much looking forward to seeing our understanding of inflation dynamics deepened thanks to the research efforts stimulated by conferences such as this. thank you very much for your attention.