In a recession in which short-term nominal interest rates have already been pushed to zero, therefore, further downward adjustment in nominal interest rates is difficult, if not impossible. Because the real interest rate equals the nominal interest rate less the expected rate of inflation, the zero bound on nominal interest rates can lead to rapidly increasing real rates if deflation intensifies.
I expect that restructuring of business portfolios will move forward, thereby enhancing productivity through creation of value-added and business growth. 1 2  The action plan was decided at the Committee on the Growth Strategy on December 1, 2020. See footnote 1.