Here are the two graphs from today's lecture. The bottom one is the inflation rate, the salient point being that is has been negative, i.e., deflation, for quite a lot of the past 10 years. The top one shows the Bank of Japan's interest rate, which has hit zero (recall that a negative nominal interest rate isn't possible as people would be better off holding cash under their mattresses if necessary). Even at a zero nominal interest rate, negative expected inflation means that the real rate of interest is positive.
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