A previous post has been updated with new figures comparing the policy rates, inflation rates, and real policy rates in Sweden, the Eurozone, the UK, and the US. The Riksbank’s real policy rate increased by 3.5 percentage points to plus 1 during 2010-2011, whereas the real policy rates stayed low and negative in the other economies. According to this measure, the Riksbank’s policy was extremely tight during 2010-2013. More recently, the real policy rates has fallen in Sweden and risen in the other economies except the US.
However, one can also assess the monetary policy stance according to the outcome for inflation and unemployment. Since in May 2015 the inflation rate remains far below the target and the unemployment rate remains far above a long-run sustainable rate, and they are likely to remain so for quite a while, one may with this measuring rod conclude that monetary policy in Sweden is still contractionary, even strongly contractionary.