Nevertheless, it seems that their expectations of future growth in the somewhat longer term are being maintained. In that  BIS Review 66/2008  3  case, if the downside risks do not materialize and uncertainties become smaller, households and firms may come to expect higher economic growth. If this happens, the current low interest rates will have a stronger impact on Japan's economy.
Generally speaking, the prolongation of an accommodative financial environment in a situation where aggregate supply and demand in the economy remain more or less balanced tends to have an unfortunate effect on people's decision-making; they become unconsciously too optimistic in assessing risks, and firms and households as well as financial institutions may overextend themselves, resulting in a long-run misallocation of resources and significant swings in the economy.