The difference would be that we open up for the possibility that it could take longer than we previously assumed, without making monetary policy more expansionary. ... but the aim of the policy would not change If we were to find ourselves in such a situation it would not mean that we were suddenly to start conducting a completely different policy and begin raising the repo rate, for instance. There would still be reasons to conduct a policy that is as expansionary as possible, to avoid taking longer than necessary to attain the target. However, one consequence would be that the Riksbank's communication became very important. The damage in a situation where monetary policy can no longer be made more expansionary, despite inflation being expected to undershoot the target for quite a long time, will be much less if the general public can be convinced that the target has not been abandoned, that it is merely a question of taking longer than normal to attain it. Clarifying this would be a difficult but hopefully not impossible task. Here it is important to realise that inflation can be controlled by the central bank in the long run. Inflation is ultimately, as is often put, a monetary phenomenon and determined by how expansionary monetary policy is on average (see Figure 12). Digitalisation, globalisation and other structural changes can push down inflation during certain periods of time, and these periods can very well be quite long. However, the effects of structural changes on inflation do not last for ever.
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