at around 2 percent. then federal reserve chair janet l. yellen referred to this point in the speech at the commonwealth club cited above. as indicated by japan's experience of suffering from prolonged deflation, the difficulty of overcoming deflation has become well known. this is perhaps one of the factors that motivated major central banks to reach a consensus of defining price stability as an annual inflation rate of 2 percent. " is the world at risk of the'japan disease '? " the international economy, summer 2017. why exactly is deflation problematic? for households, it is problematic because it often goes hand - in - hand with a decline in their wages. there may be some who argue that, putting aside wages, deflation is actually a desirable phenomenon because it increases real income. indeed, it may be true that a transient mild deflation would cause no particularly significant problems. if it continues for a protracted period, however, households will ultimately be forced to bear the burden through economic stagnation. deflation becomes a factor weighing heavily on the economy through a number of channels. one of the well - known textbook examples of the problem is that, when deflation continues, households and firms - - in anticipation of further falls in prices of goods and services and continued uncertainty - - tend to opt for postponing expenditure and reining in borrowing. such behavior could lead the overall economy to prolonged weak growth and deflation, thereby creating a vicious cycle within the economy. furthermore, there also is the complex problem that if deflation drags on, it becomes embedded in the habits of people, making an exit from deflation even more difficult. in the case of japan, it seems that achieving the price stability target of 2 percent has been made more difficult by the fact that the experience of over 15 years of deflation has become entrenched in people's mindset. in light of these points, a complete exit from deflation under the price stability target of 2 percent will ultimately be desirable for households in japan. while the rest of the world is trying to learn the lessons of japan's long period of deflation, we should also face our own experience more squarely. the second point concerns the importance for japan of pursuing price increases that are more or less equivalent to those of other countries. two percent inflation is often referred to as the global standard. more essentially, however, it should be emphasized that the realization of similar inflation rates by japan and other countries will bring stability

radovan jelasic : start of the ecb / escb needs analysis programme in belgrade introductory statement by mr radovan jelasic, governor of the national bank of serbia, at the press conference on the occasion of the signing of the protocol between the european central bank, the national bank of serbia, the european agency for reconstruction and the delegation of the european commission to the republic of serbia, belgrade, 1 september 2008. * * * ladies and gentlemen, our honorable guests, i would like to express a special gratitude to ms. gertrude tumpel - gugerell, a member of the executive board of the ecb, mr. josep lloveras, head of delegation of the european commission to the republic of serbia, mr. daniel giuglaris, head of the ear operational centre in serbia, as well as to the representatives of the ecb and 9 national central banks of the european system of central banks ( escb ), out of 17 participating in the project, being present here and taking part in this, for us, a very historical event. signing the protocol today among the parties mentioned above marks a beginning of the realization of the “ needs analysis for the national bank of serbia ” project aimed to identify the gap that the national bank of serbia needs to cover in order to meet the standards of european system of central banks. the subject of analysis will be six work areas in the competence of the national bank of serbia. they will be thoroughly examined by experts from the european central bank and 17 partner central banks involved in the project over the next nine months, by the end of may of 2009. this project will lay down the roadmap for the national bank of serbia to the escb. the road to the eu is not an event but a process that, among all else, requires us to build up strong and efficient institutions and to strengthen administrative and human capacities. the national bank of serbia has so far been positively proactive and i can assure you that we will continue to be the engine of the serbian transition process in the future as well. this is the first project ever between the ecb / ecsb and the nbs and it is a direct proof of the strong determination of our institution to meet the european standards of central banking. actually, as early as during its incorporation in 1884, the national bank of serbia showed strong commitment to the european values, and in that very same year incorporated the best european practices into the first law on the