“Monetary policy and financial-stability policy are different and normally best conducted independently,” in Monetary Policy in a Changing Financial Landscape, ECB Forum on Central Banking, Sintra, Portugal, May 25-27, 2014, page 81-89. Conference proceedings.
Category Archives: Comments, discussions
How to weigh unemployment relative to inflation in monetary policy?
“How to weigh unemployment relative to inflation in monetary policy?“, panel discussion at Fulfilling the Full Employment Mandate, the 57th Economic Conference at the Federal Reserve Bank of Boston, April 12-13, 2013. Journal of Money, Credit and Banking, Supplement to Vol. 46, No. 2 (October 2014), 183-188.
Correction: Page 186, 3rd paragraph, 2nd line and 4th paragraph, 2nd line: Should be “…above a long-run sustainable rate” instead of “…below a long-run sustainable rate.”
Comments on Bordo and Siklos
Comments on Bordo and Siklos, “Central Bank Credibility: An Historical and Quantitative Exploration,” at Norges Bank Conference “Of the Uses of Central Banks: Lessons from History,” Oslo, June 5-6, 2014.
Svar till Andersson och Jonung I (Reply to Andersson and Jonung I, in Swedish)
Fredrik Andersson och Lars Jonung framför kritik mot min analys av och mina slutsatser om Riksbankens penningpolitik, dels i en artikel i Ekonomisk Debatt 3/2014 (Andersson och Jonung 2014), dels i en intervju av Jonung i Dagens industri 2014-04-17. Här är mitt svar om artikeln. Här finns ett kort svar till intervjun. Här är ett kort svar till deras replik.
Kritiken kan sammanfattas i tre punkter:
(1) I motsats till vad jag hävdat (t.ex. i Svensson 2014), skulle Riksbanken ha uppfyllt inflationsmålet.
(2) Min skattning i Svensson (2013a), av hur mycket högre den genomsnittliga arbetslösheten under 1997-2011 blivit på grund av lägre inflation än målet, skulle inte vara robust. Den skulle bygga på en för enkel modell och bortse från att inflationsförväntningarna har varierat. Mina resultat skulle inte hålla om hänsyn tas till varierande inflationsförväntningar. Mina resultat skulle inte heller hålla om man jämför med andra skattningar av jämviktsarbetslösheten.
(3) Riksbanken skulle ha begränsad möjlighet att genom penningpolitiken påverka sysselsättning och arbetslöshet i en liten öppen ekonomi som den svenska. Riksbanken borde inte ha sysselsättning och arbetslöshet som mål.
Andersson och Jonung tycks dock missta sig på samtliga punkter. Continue reading
Misleading statement in interview with Kenneth Rogoff in Svenska Dagbladet
In an interview today, April 16, in Svenska Dagbladet, Kenneth Rogoff is quoted as saying (my translation from Swedish):
“I know that there are commentators, such as Lars EO Svensson, who don’t believe that debt is affected by interest rates.”
It is wrong to say that I would believe that debt is not affected by interest rates. Instead, some of my work has dealt with precisely how monetary policy affects household indebtedness. For instance, this paper deals with how monetary policy affects real debt and the debt-to-GDP ratio.
My view, and the result of the Riksbank’s own calculations (se here and here), is that the impact of monetary policy on household real debt and debt ratios in Sweden is normally very small (and may even be of either sign). The impact on any risks associated with household debt is negligible. Therefore, monetary policy in Sweden should focus on the traditional objectives of monetary policy, namely to stabilize inflation around the inflation target and unemployment around a long-run sustainable rate.
Comments on Chung, Herbst, and Kiley, “Effective Monetary Policy Strategies in New Keynesian Models: A Re-examination”
Inflation targeting and “leaning against the wind”
International Journal of Central Banking 10 (June 2014) 103-114. Revised version of comments given the 2013 IJCB conference “Inflation Targeting and Its Discontents”, September 6-7, 2013, Warsaw, hosted by Narodowy Bank Polski (National Bank of Poland).
An extended more recent version is available here. Continue reading
Causes of the financial crisis – Comments on Justin Lin, Against the Consensus
Comments on Justin Y. Lin, Against the Consensus, SNS, October 7, 2013.
New comment: “Discussion of Athanasios Orphanides and Volker Wieland ‘Complexity and Monetary Policy'”
New comment: “Discussion of Athanasios Orphanides and Volker Wieland ‘Complexity and Monetary Policy’,” International Journal of Central Banking 9, Supplement 1 (2013) 205-218.