15  1.800  Figure 7. Cost of risk and ROE (annualized data; basis points and percentage points)  Source: Bank of Italy. Figure 8. Gross income: dynamic of interest and non-interest income (annualized data; indices, 100= December 2008)  Source: Bank of Italy. 16  Figure 9.
In other words, although an expansion of the economy’s supply capacity may delay rises in wages and prices, I do not think that it will hold them back for any protracted period. In my view, therefore, Japan’s economy is currently experiencing adjustments arising from positive structural changes.