I recognize that this last option involves hard choices and short-term pain. However, in my view it is the responsible path to sustainable economic growth with price stability. The alternative options inevitably lead to financial crisis and greater long-run losses in national income and wealth.
Moreover, attention should be paid to (1) the effects of the continued appreciation of the yen since autumn 1998; (2) those of the recent rise in long-term interest rates; and (3) the uncertainty in financial and economic developments abroad.