Prof. Watanabe's interview in the Nikkei

An interview with Prof. Tsutomu Watanabe, co-investigator in our project, has been published in the morning edition of the daily "Nikkei" on December 17, 2019 (p.5).
The interview is the first installment in the series of articles entitled "Neoeconomy", which examine the question of what new policies should be adopted by individual states as the world economy undergoes a structural change.
The interview opens with the question: why is Japan unable to reach the inflation target set by its central bank? Prof. Watanabe is of the opinion that the digitalization of economy is at the root of the problem, since online shopping is pushing the prices down and computer generated products can be reproduced and copied at little expense. The spreading of such products, which are free of charge, makes raising the prices of traditional goods difficult, too.
In his answer to the question of what should central banks do to counter this, Prof. Watanabe said that they should take into account the influence of new technologies on the economy and broaden the scope of the data they collect, by including, for example, the data on online shopping portals.
Prof. Watanabe also points to the fact that behiund the current debates in the FRB that rather than insisting on achieving one-month or two-month (short-term) goals, a mid-term oriented stance should be adopted and that the growth of the nominal GDP should be adopted as a new goal is the understanding that it is increasingly difficult to measure commodity prices. Furthermore, Prof. Watanabe remarked that in Japan, although there are those who are asking for the inflation target to be lowered, debates should not be confined just to the issue of the targeted inflation, but should be broader and include policies for dealing with the increased importance of non-monetary economy (such as gratis products and services), which now coexists with monetary economy and is growing in volume. One concrete measure that could be adopted, as a standard on which to base decisions by the central bank, is measurement of time use (which would help encompass non-monetary economy).