In recent years, an increasing number of central banks use macro stress-testing as a main tool to assess the robustness of the financial system against severe stresses to the economy, such as deep recessions and sharp rises in interest rates. This paper describes a framework for macro...

In this paper, we empirically analyze the interaction between the distortions in the real side of the economy (real distortion) and those in the financial side of the economy (financial distortion) in Japan after the 1990s. We focus on protracted economic stagnation after the bursting of the...

The primary objective of the Bank of Japan (BOJ) in conducting monetary policy is to promote sustainable growth by achieving price stability. The price stability that needs to be achieved is regarded as not just short-term and temporary, but sustainable in the medium to long term, which is the...