Yearly Archives: 2013

Publication: “Evaluating Monetary Policy”

New publication: “Evaluating Monetary Policy,” in Koenig, Evan F., Robert Leeson, and George A. Kahn, eds., The Taylor Rule and the Transformation of Monetary Policy, Hoover Institution Press, 2012, p. 245-274. PDF

The line: With a modified Taylor curve, the forecast Taylor curve, and plots of mean squared gaps showing the tradeoff between the variability of the inflation-gap and output-gap forecasts it is possible to evaluate policy ex ante, that is, taking into account the information available at the time of the policy decisions, and even evaluate policy in real time.

Lars E.O. Svensson lämnar Riksbanken

“Lars E.O. Svensson lämnar Riksbanken,” pressmeddelande och presskonferens, 20 april 2013. Pdf: English Svenska

Vice riksbankschef Lars E.O. Svensson lämnar Riksbanken vid utgången av sin mandatperiod den 20 maj. Skälet är att han inte lyckats få stöd för en penning-politik som han anser skulle leda till bättre måluppfyllelse för både inflationen och arbetslösheten.

“Jag avser att lämna Riksbanken när mitt nuvarande mandat går ut och står således inte till tillförfogande för ett förnyat mandat. Skälet till detta är att jag inte lyckats få gehör för en penningpolitik som jag anser skulle leda till bättre måluppfyllelse, med både en högre inflation närmare målet på 2 procent och en lägre arbetslöshet. Jag vill samtidigt betona att tiden på Riksbanken varit en fantastiskt intressant och lärorik tid. Bland det bästa med arbetet på Riksbanken har varit kontakten och samarbetet med Riksbankens många utomordentligt kunniga och kompetenta medarbetare. Det är något som jag verkligen kommer att sakna. Jag har också fått tillfälle att se att de metoder för praktisk penningpolitik som jag varit med om att utveckla, före och under min tid på Riksbanken, faktiskt fungerar. Rätt tillämpade kan de användas för att uppnå en väl avvägd penningpolitik”, säger Lars E.O. Svensson.

Press conference video (in Swedish):

Lars E.O. Svensson leaves the Riksbank

“Lars E.O. Svensson leaves the Riksbank,” press release and press conference, April 22, 2013. Pdf: English Swedish

Deputy Governor Lars E.O. Svensson will leave the Riksbank when his period of office expires on 20 May. The reason is that he has not managed to get support for a monetary policy that he considers would lead to better target fulfillment for both inflation and unemployment.

“I intend to leave the Riksbank when my current term expires, and I am hence not available for a renewed term. The reason is that I have not managed to get support for a monetary policy that I consider would lead to better target fulfillment, with both higher inflation closer to the target of 2 per cent and lower unemployment. At the same time, I would like to emphasize that my time at the Riksbank has been an extremely interesting and instructive time. One of the best things about working at the Riksbank has been the contact and collaboration with the many extraordinary knowledgeable and competent staff members. This is something that I will certainly miss. I have also had the opportunity to see that the methods for practical monetary policy that I have participated in developing, before and during my time at the Riksbank, actually work. Used in the right way, they can achieve a well-balanced monetary policy,” says Lars E.O. Svensson.

Press conference video (in Swedish):

Reservation against the Riksbank Account of Monetary Policy in 2012

I enter a reservation against the Account of monetary policy in 2012, because I consider the account to be incomplete and in several respects misleading and thus it does not offer an adequate basis for an assessment of the Riksbank’s monetary policy. Read more (English Swedish)

Target attainment is currently poor, since inflation is way below the inflation target and unemployment is way above a reasonable long-run sustainable rate. An important issue is whether target attainment could have been better with a more expansionary monetary policy, but a thorough analysis of this issue is missing in the account. That monetary policy has not been more expansionary is, as far as can be judged, because it has to a great extent been conducted for the purpose of limiting household debt. However, extensive research and several inquiries show quite unequivocally that the policy rate has little effect on the household debt ratio. The fact that this is the case is not indicated in the account. A more expansionary monetary policy with an unchanged low policy rate since 2010 would according to a preliminary calculation have held CPIF inflation close to the target, led to much lower unemployment and led to an insignificantly higher debt ratio in the short term, while not affecting the debt ratio in the long term. Read more (English Swedish)
Reservation (English) Reservation (Swedish)   Account of monetary policy 2012 (English)  Redogörelse för penningpolitiken 2012 (Swedish)