Englund and Svensson reject Riksbank’s proposal for target variable and variation band

Consultation response to the Riksbank’s memorandum “Change of target variable and introduction of variation band”

Peter Englund and Lars E.O. Svensson, Stockholm School of Economics pdf Swedish Ekonomistas

The Riksbank’s proposal for a change of target variable and the introduction of a variation band is rejected. There is no urgent need for these changes now, and it is inappropriate to forestall the parliamentary committee that currently reviews the monetary policy framework, including the issue of the choice of target variables and a possible variation band. The proposal for introduction of a variation band is specifically rejected. It does not serve any purpose and can, in practice, create a significant ambiguity about the inflation target, result in less effective anchoring of inflation expectations, and make it more difficult both to evaluate the Riksbank’s target achievement and to hold the Riksbank accountable for fulfilling the monetary policy goals. Continue reading →

Remissvar på Riksbankens PM om “Byte av målvariabel och introduktion av variationsband”

Peter Englund och Lars E.O. Svensson, Handelshögskolan i Stockholm pdf English Ekonomistas

Riksbankens förslag om byte av målvariabel och introduktion av ett variationsband avstyrks. Det finns inte något akut behov av dessa förändringar nu och det är olämpligt att föregripa den parlamentariska kommitté som gör en översyn av det penningpolitiska ramverket som bl.a. innefattar valet av målvariabel och eventuellt variationsband. Förslaget om introduktion av ett variationsband avstyrks speciellt. Det fyller inte någon funktion och kan i praktiken skapa en betydande oklarhet om penningpolitikens mål, ge ett sämre ankare för inflationsförväntningarna samt försvåra såväl en utvärdering av måluppfyllelsen som ett ansvarsutkrävande av Riksbanken. Continue reading →

New revision: “Cost-Benefit Analysis of Leaning Against the Wind”

New revision of “Cost-Benefit Analysis of Leaning Against the Wind,” May 2017.

The first version, under the title “Cost-Benefit Analysis of Leaning Against the Wind: Are Costs Larger Also with Less Effective Macroprudential Policy?”, was published as IMF Working Paper WP/16/3, January 2016.

Vox column: Re-evaluating the result that the costs of ‘leaning against the wind’ exceed the benefits

Vox column: Re-evaluating the result that the costs of “leaning against the wind” exceed the benefits, January 24, 2017.

The IMF and the Federal Open Market Committee have both suggested that the costs of ‘leaning against the wind’ exceed the benefits. This Vox column responds to claims that the results of my research backing up this conclusion could be overturned. It argues that the alternative assumptions necessary to overturn the result are unrealistic, and that the finding that the costs of the policy exceed the benefits therefore seems to be robust.

The column summarizes “How Robust Is the Result That the Cost of “Leaning Against the Wind” Exceeds the Benefit? Response to Adrian and Liang.”

How Robust Is the Result That the Cost of “Leaning Against the Wind” Exceeds the Benefit? Response to Adrian and Liang

“How Robust Is the Result That the Cost of ‘Leaning Against the Wind’ Exceeds the Benefit? Response to Adrian and Liang,” working paper, January 2017. CEPR Discussion Paper DP11744. ECB Working Paper No. 2031/February 2017.
Vox column

Continue reading →

Commentary on Monetary Policy and Financial Stability

“Commentary on Monetary Policy and Financial Stability” (slides), presented at “Challenges to Financial Stability in a Low Interest Rate World,” Annual International Journal of Central Banking Research Conference, Federal Reserve Bank of San Francisco, November 21-22, 2016

Discussion text of Kocherlakota, “Rules versus discretion: A reconsideration”

The text is now available of my discussion of Kocherlakota, “Rules versus Discretion: A Reconsideration,” presented at the Brookings Papers on Economic Activity, Fall 2016 Conference, Washington, DC, September 15-16, 2016.

Panel presentation: Should monetary policy take financial-stability considerations into account at the ELB?

“Should Monetary Policy Take Financial-Stability Considerations into Account at the ELB?”, panel presentation (slides) at the First ECB Annual Research Conference, “Monetary Policy and Financial Stability in a Low Interest Rate Environment,” Frankfurt, September 28-29, 2016.

Discussion of Gelain, Lansing, and Natvik: “Leaning against the credit cycle”

Discussion (slides) of Gelain, Lansing, and Natvik: “Leaning against the credit cycle,” Swiss National Bank Research Conference “New Perspectives on the role, instruments and effects of monetary policy,” Zurich, September 23-24, 2016.

Discussion of Kocherlakota, “Rules versus discretion: A reconsideration”

Discussion (text, slides) of Kocherlakota, “Rules versus Discretion: A Reconsideration,” Brookings Papers on Economic Activity, Fall 2016 Conference, Washington, DC, September 15-16, 2016.

Keynote presentation: Monetary policy and financial stability – Cost-benefit analysis of leaning against the wind

Keynote presentation at the Norges Bank Conference “Rethinking Inflation Targeting,” Oslo, September 8-9, 2016. Slides. Paper.

The recent Swedish experience of monetary policy and macroprudential policy

“The Recent Swedish Experience of Monetary Policy and Macroprudential Policy,” slides presented at Riksrevisionen (The Swedish National Audit Institution), Stockholm, August 30, 2016.

Interview in IMF Research Bulletin

“Monetary Policy, Financial Stability, and Life at the IMF,” interview in IMF Research Bulletin, June 2016.

Discussion of Filardo and Rungcharoenkitkul, “Quantitative case for leaning-against-the-wind”

Discussion (slides) of Filardo and Rungcharoenkitkul, “Quantitative case for leaning-against-the-wind,” CCBS Research Forum on Macro Finance, Bank of England, London, May 26-27, 2016.

Interview in Svenska Dagbladet: Today’s negative interest rate is needed because the rate was hiked too fast earlier

Interview in Svenska Dagbladet, May 23, 2016 (in Swedish)