Janet Yellen on the Swedish experience of policy tightening: “appreciable economic costs”

Chair Janet Yellen on the recent Swedish experience of Riksbank policy tightening, in a speech at the conference “The New Normal for Monetary Policy,” Federal Reserve Bank of San Francisco, March 27, 2015:

The experience of Japan over the past 20 years, and Sweden more recently, demonstrates that a tightening of policy when the equilibrium real rate remains low can result in appreciable economic costs, delaying the attainment of a central bank’s price stability objective.