It is true that we had maintained low interest rates for a relatively long period, even after the summer of 1988 when the economy was clearly on a recovery path, and allowed 1  BIS Review 55/2000  unfounded expectations to be embedded in the market and society that such low interest rates would continue for a considerable period.
As regards the outlook for the economy, growth in net exports is unlikely to be strong enough to prevent the deterioration of the economy, partly reflecting further adjustments in other Asian economies. Business fixed investment will continue to decrease due mainly to the decline in corporate profits and is likely to enter an adjustment phase.