Haruhiko Kuroda: "Central bank design under a continued low inflation and interest rate environment" - opening remarks

Opening remarks by Mr Haruhiko Kuroda, Governor of the Bank of Japan, at the 2019 BOJ-IMES Conference "Central bank design under a continued low inflation and interest rate environment", hosted by the Institute for Monetary and Economic Studies and the Bank of Japan, Tokyo, 29 May 2019.

The views expressed in this speech are those of the speaker and not the view of the BIS.

I. Introduction

Good morning. I am honored to welcome such distinguished guests from around the globe to the 25th BOJ-IMES Conference. On behalf of the conference organizers, I thank all the guests in this room.

This year's conference is titled "Central Bank Design under a Continued Low Inflation and Interest Rate Environment." The current theoretical framework for monetary policy was developed before the Global Financial Crisis. At that time, inflation and interest rates in most advanced economies - with Japan being the notable exception - were high enough to make conventional monetary policy effective. To stimulate the economy, central banks had sufficient safety margins to reduce short-term nominal interest rates. After the Global Financial Crisis, however, this situation changed significantly. Both inflation and nominal interest rates have remained far below their pre-crisis levels for more than a decade.