paper series 21476. cambridge, mass. : national bureau of economic research, august. international monetary fund ( 2015 ). world economic outlook : adjusting to lower commodity prices ( pdf ). washington : imf, october. kiley, michael t. ( 2015 ). “ what can the data tell us about the equilibrium real interest rate? ( pdf ) ” finance and economics discussion series 2015 – 077. washington : board of governors of the federal reserve system, august. laubach, thomas, and john c. williams ( 2003 ). “ measuring the natural rate of interest, ” review of economics and statistics, vol. 85 ( 4 ), pp. 1063 – 70. valletta, rob, and catherine van der list ( 2015 ). “ involuntary part - time work : here to stay? ” frbsf economic letter 2015 – 19. san francisco : federal reserve bank of san francisco, june. bis central bankers ’ speeches

says to render unto monetary policy things that concern price stability, and render unto macroprudential policy things that concern financial stability. on the other hand, the latter holds that, if the amplification of financial imbalances is expected to threaten price stability in the long run, the central bank should resort to monetary policy in order to dampen the financial cycle, notwithstanding a temporary deviation of inflation from the target. let me offer you my views, which are influenced by the experiences of the japanese bubble. up until the 1980s, the bank of japan was requiring banks to comply with guidance that set their loan growth at levels individually assigned by the bank. this arrangement, called “ window guidance ” was then regarded as a tool for monetary policy, but under the current taxonomy, it would be regarded as a time - varying macroprudential policy tool, akin to regulation of loan - to - value ( ltv ) or debt - to - income ( dti ). there were two schools of thought regarding the effectiveness of the tool : the “ independent tool theory, ” which held that window guidance was effective by itself, and the “ complementary tool theory, ” which held that window guidance had to be used alongside the mainstream monetary policy of official discount rate adjustments to be effective. the subject was actively discussed in academia, and those supporting the independent tool theory argued that a tightening of window guidance could dampen the financial cycle, even if the official discount rate was held steady. 5 the bank of japan, in the meantime, basically adopted the complementary tool theory and explained window guidance as a tool to support general policy instruments, such as changes to the official discount rate, rather than an independent policy instrument. notwithstanding such an official position, in the last half of the 1980s, as the call for international policy coordination necessitated the maintenance of a low interest rate environment with a view to expanding domestic demand, the bank of japan attempted to respond to signs of financial excesses through the tightening of window guidance. as a result, the growth of bank lending slowed gradually, but large corporates were still able to raise funds from outside the banking sector through the issuance of bonds ( chart 6 ). the period coincided with the gradual relaxation of underwriting guidelines for corporate bonds, and the buoyant stock market, which was partly a reflection of monetary easing, that reduced the costs of equity financing, such as convertible bonds and bonds with embedded warrants. the resulting increases in capital market financing sustained the relaxed financial environment,