I. Economic Developments Let me start by talking about developments in Japan's economy. The economy is expanding moderately, and the real GDP growth rate for the April-June quarter registered a firm increase of 2.5 percent on an annualized basis. It is the first time in eleven years, since 2006, that it has continued to mark positive growth for six consecutive quarters (Chart 1).
The Bank of Japan has often been criticized for an alleged delay in monetary easing. A number of research has been conducted, including among others those by the BOJ staff as well as by the Federal Reserve Board staff, to assess the easing path by applying a standard 3 backward-looking 'Taylor rule' as criteria. Chart 2 shows one such example.