The “Reiwa National Conference”, commonly known as “Reiwa Rincho”, which is attended by experts such as economics and university professors, reviews the “Joint Statement” signed by the government and the Bank of Japan 10 years ago, and aims to increase wages. Aiming for sustainable economic growth, he recommended that the government work on fiscal and monetary policy reforms.

The “Reiwa Rincho”, which was launched in June last year, compiled its first policy recommendations on the 30th.

Among them, the joint statement by the government and the Bank of Japan 10 years ago aimed at overcoming deflation and achieving sustainable economic growth under a 2% inflation rate, while saying that "the intention was correct." also said the BOJ's massive purchases of government bonds have supported increased fiscal spending, delaying reforms vital to growth.

It also points out that the limits of large-scale monetary easing measures are beginning to appear.

On that basis , we proposed that a new "joint statement" be made

, and the government and the Bank of Japan set the common goal of creating an environment for achieving sustainable economic growth through wage increases and stable price increases. I think you should.

He also

asked the government to prioritize fiscal spending, establish a sustainable fiscal structure through expenditure and revenue reforms, and build a mechanism to restore confidence in finance.

On the other hand,

▽ The Bank of Japan has newly positioned the "2% price target", which has been said to be achieved as soon as possible, as a long-term goal, and requested that the interest rate function be restored and the government bond market normalized.

MUFG Bank Special Advisor Nobuyuki Hirano, who compiled the proposal, said at a press conference, "There is a sense of crisis that if the policy continues as it is, we may fall into a crisis situation, and we cannot wait any longer. A new capitalism. "This timing is extremely important, as the policy of the Bank of Japan begins to work in earnest and the term of office of the governor of the Bank of Japan is about to expire."

Details of this proposal

This proposal severely evaluates the policy responses of the government and the Bank of Japan since the joint statement was issued 10 years ago.

[Evaluation of the joint statement

10 years ago] In addition to setting a price target of 2% in the joint statement 10 years ago, the government has announced that it will promote efforts to implement growth strategies and establish sustainable public finances. However, it points out that "the growth strategy promised in the joint statement by the government has not achieved sufficient results, and the commitment to fiscal consolidation has not been kept."

▽ The

Bank of Japan's large-scale monetary easing and the accompanying large-scale purchase of government bonds have effectively supported the expansion of fiscal expenditures on the government side, stating that ``fiscal policy and monetary policy have had a negative interaction. He severely criticized the government, saying, "There is no stopping the spread of fiscal spending."

On top of that, he said, "Shouldn't we verify the efforts of 10 years and clarify the way of new cooperation?"

[Draft outline of the newly presented joint statement]

▽The government and the Bank of Japan have set as a common goal the creation of an environment for realizing sustainable economic growth in which productivity improvement, wage increases, and stable price increases occur. increase.

▽ We are asking the government to prioritize fiscal spending and increase the potential growth rate, as well as to facilitate labor movement and accelerate structural reforms such as the digitalization of society.

It also calls for reforming expenditures and revenues to establish a sustainable fiscal structure and build a mechanism to restore fiscal confidence.

On the other hand,

▽For the Bank of Japan, the "2% price target", which has been said to be achieved as soon as possible, will be newly positioned as a long-term target, aiming for sustainable economic growth accompanied by stable price increases.

Furthermore, it calls for the recovery of interest rate functions and the normalization of the government bond market.


also recommends the establishment of an institutional mechanism to periodically verify and point out whether cooperation between the government and the Bank of Japan is progressing smoothly and whether the Japanese economy is heading for sustainable growth. increase.

It also asks for specific disclosure of costs and risks that may arise in the process of policy normalization as a side effect of fiscal sustainability and monetary easing.

What was the joint statement of the government and the Bank of Japan 10 years ago?

A decade ago, in January 2013, one month after the start of the second Abe administration, the government and the Bank of Japan jointly signed a statement between the Cabinet Office, the Ministry of Finance, and the Bank of Japan.

The joint statement calls for the government and the Bank of Japan to work together to overcome deflation and achieve sustainable economic growth with price stability.

Until then, the Bank of Japan had stated that it was aiming for a price increase rate of 1%, but in the joint statement, the BOJ set the price stability target at 2% and promoted monetary easing, We aim to implement it as soon as possible.

Based on this joint statement, Governor Kuroda, who took office in March 2013, set a price stability target of 2% and launched a new level of monetary easing.

In addition, the joint statement states that the government's role is to:

take specific measures to strengthen the competitiveness and growth potential of the Japanese economy, and strongly promote them;

, to steadily promote efforts to establish a sustainable financial structure, and calls for growth strategies and fiscal consolidation efforts.

The joint statement has not been revised once for about 10 years since then, but among experts, in order to give flexibility to the Bank of Japan's monetary policy, the

▽ inflation rate target was set at "around 2%".

It has also been pointed out that the target should be changed from

the ▽ "as early as possible" target to a more medium- to long-term target.

On the other hand, it has been pointed out that if the joint statement is revised, speculation that the BOJ will make a major revision to its monetary policy will spread among market participants, which could lead to turmoil in financial markets.