“Monetary Policy, Financial Stability, and Life at the IMF,” interview in IMF Research Bulletin, June 2016.
Interview in Svenska Dagbladet, May 23, 2016 (in Swedish)
Bloomberg interview, April 13, 2016.
An interview of me by IMF Survey.
- Monetary policy is not suitable for managing housing booms and rising household debt
- Not all housing booms pose a problem
- Identifying problem cases requires deep and complex analysis
- The need to keep monetary policy rates low to support an ailing economy, but at the same time, manage a boom in the housing market—that’s the scenario in which many policymakers around the world find themselves in. How should policymakers approach this type of scenario?
- Can monetary policy be used to manage problems associated with a housing boom?
- How can policymakers assess whether household debt poses a problem?
- So, if monetary policy is not suitable, how can any problems with household debt be handled?
“Noll ränta räcker inte“, Ekonominyheter från Ekot, Sveriges Radio (“Zero interest rate is not enough,” Radio Sweden’s Economy News (in Swedish)), December 30, 2014.
Short interview in Reuters, November 27, 2014.
Interview in Svenska Dagbladet, November 11, 2014: “Sänk räntan till minus” (“Set the policy rate negative, in Swedish)
Interview in Svenska Dagbladet, November 11, 2010: “Jonung har helt enkelt fel i praktiskt taget allt han säger” (“Jonung is simply wrong in practically all he is saying,” in Swedish)
New interview in Bloomberg: “Riksbanker who left in protest says untried steps only hope,” October 27, 2014.
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.
New interview in Svenska Dagbladet, April 4, 2014: “Professorn läxar upp Riksbanken” (“The professor berates the Riksbank,” in Swedish).
Interview in Svenska Dagbladet, paper edition, January 16, 2014: “It has been different in other countries” (in Swedish).
Interview by Radio Sweden (in English), January 15, 2016.