In Japan, the build-up was in the corporate sector (Chart 5). Certainly, large deviations from longer-term trends in themselves are not definitive, but are a strong indication that unsustainable financial imbalances are likely to be accumulating. What is important is to have both an economy-wide assessment and assessment at a somewhat more disaggregated level, for example at the sector level.
Importantly, it stresses that, from the point of view of monetary policy, the two mandates are typically complementary. As I noted earlier, monetary policy pushes employment and inflation in the same direction. But, as it turns out, most shocks that push employment down also tend to push inflation down over the medium run.