Lars Heikensten: Monetary policy and wage formation Speech by Mr Lars Heikensten, Governor of the Sveriges Riksbank, to the Riksdag Committee on Finance, Stockholm, 13 February 2003. *  *  *  Firstly, I would like to thank you for the invitation to come here to the Riksdag and discuss wage formation together with Anders Lindström from the National Mediation Office and Ingemar Hansson from the National Institute of Economic Research. I shall begin by describing how we take wage formation into account when making decisions on interest rate changes. Then I shall comment on the assessment made in our most recent Inflation Report (published in December), which we did not find reason to alter significantly at our last monetary policy meeting on 6 February. I shall continue by discussing how wage formation may develop in future. In conclusion, I shall summarise and mention some of the challenges facing wage formation. Just over a decade ago, there was a comprehensive realignment in economic policy. The budgetary process was tightened up. At around the same time, monetary policy changed direction, the exchange rate was allowed to float and the new target was to limit inflation to 2 per cent, with a tolerated deviation of plus/minus 1 percentage point. The economic policy realignment can only be described as a success.
Bundesbank, Frankfurt – 26 September 2019 Speech in the presence of Jens Weidmann  by François Villeroy de Galhau Governor of the Banque de France  « Household Expectations »  1  Ladies and Gentlemen, It is a great pleasure for me to open - with my colleague Jens Weidmann - this joint Bundesbank - Banque de France conference on households’ expectations. I would like to thank warmly the Bundesbank: this FrenchGerman cooperation testifies that our two institutions can promote and contribute to good research on a very topical policy issue. Over the past year, the decline of market inflation expectations has been pronounced while households’ expectations have been increasing quite steadily. This divergence is a challenge for our assessment on inflation expectations. All the interesting papers presented in the next couple of days will illustrate how much we can learn on inflation expectations when observing them outside financial markets. I. Inflation expectations: a key issue for monetary policy  I.1. Policy relevance for Central Banks  Stable inflation expectations at a level close to our target are - of course - key for our monetary policy: they provide a strong nominal anchor helping us to stabilize inflation when facing large demand or supply shocks. Since the 1990s, management of inflation expectations through central bank communication has become a standard tool for monetary policy. A lot of evidence suggests that this policy has contributed to anchor inflation expectations and to reduce their volatility, while facing strong inflationary or deflationary shocks.