, central banks cut off the negative loop between financial markets and the real economy. we have certainly made full use of our experience in the global financial crisis. the second feature is the coordination of fiscal and monetary policies. while central banks provided liquidity lifelines, governments strengthened safety nets such as income - support and job - retention measures. the division of labor between fiscal and monetary policies has generated synergy effects and contributed to preventing the economy from sliding into a free - fall. looking to the future, the challenges facing policymakers will likely change. the initial phase has been liquidity support. this will likely change to solvency and corporate viability problems, and then to resource re - allocation in response to structural changes in the economy. at the same time, policymakers face the additional challenges of the economic inequality that has become even more apparent during this health crisis, and the response to increasing worldwide concerns over climate change. likewise, the nature of the policy responses will also shift from temporary first aid measures to medium - to long - term structural policies. to one degree or another, this set of challenges is related to the stability of inflation, the real economy, and the financial system. in this sense, we are seeing a widening in the scope of issues that central banks should take into account. iv. adapting to the new normal so far, i have touched on the economic perspectives and on policy challenges. these factors will in part shape the post - pandemic new normal, although exactly how remains to be seen. one thing for certain, however, is that the world we live in will not be the same as that before the pandemic. after more than a year of living with the pandemic, we have seen a drastic change in the way our society works. in particular, the expansion of digital technology has led to a fundamental transformation in society, in ways that we could not have imagined. as i noted earlier, the shift from in - person to online activities has taken place in all aspects, such as of work, business, education, and health. expansion in the areas of remote working, online shopping, remote learning, and telemedicine is just a few examples. i myself have participated in many online 2 / 3 bis central bankers'speeches international meetings over the past year. i have benefited considerably from digital technology that allows me to reach people in different places all over the world, all at the same time. indeed, it is thanks to the online format of

. the second trend is an increase in economic inequality. the impact of the pandemic appears to be uneven and regressive, as the negative impact has been more tilted toward low - income earners and young workers. there are therefore concerns over an increase in income and wealth inequality. the third trend is an increase in debt. be it public or private, borrowing is essential to smooth economic activity and to mitigate the negative impact of the pandemic. as a result of the necessary response to tackle the pandemic, debt has been mounting in many countries. the trio of increased saving, inequality, and debt is considered to be intertwined in practice and may theoretically reduce the natural interest rate. academic research on this topic is already underway. further research and discussion is to be encouraged to promote our understanding of the new economy that will emerge after the recovery from the health crisis. b. structural change 1 / 3 bis central bankers'speeches besides these three trends, another important area to consider when we look at the postpandemic economy is the underlying structural changes emerging in technology and industry and the accompanying changes in the behavior of households and firms. perhaps the most important change we have seen during the health crisis is the wide and rapid spread of digitalization. many areas of the economy have been affected by the shift from in - person to online activities. while the movement of people across national borders has almost completely stopped, digital technology has removed geographical restrictions and eased the potential economic downturn caused by the health crisis. new businesses that use digital technology have been emerging in a wide range of areas. looking ahead, the important point is whether these structural changes lead to a wide - spread increase in productivity in the economy, and whether the fruits of growth are widely shared throughout the society. advances in digitalization are expected to enhance productivity and benefit a wide range of individuals and firms by promoting innovation and efficient resource allocation. on the other hand, it is necessary to pay attention to the possibility that, if the fruits of growth are concentrated in a small fraction of society and inequality increases, it may be difficult to achieve inclusive economic growth. iii. policy challenges next, i would like to review the policy challenges facing central banks. there are two features common to the policy responses implemented during the pandemic. the first feature is the speed of the policy responses. major central banks immediately provided massive amounts of liquidity in response to the dislocations in domestic and foreign financial markets. by doing so