International comparisons as well as surveys and similar studies that have been carried out by external analysts in the media, for example, confirm that the Bank’s monetary policy communication has worked fairly well. However, this doesn’t mean – and I want to stress this – that there are no examples of episodes when our communication in my opinion could have been better. My conclusion is that the Bank’s policy in the past ten years has worked well. Nonetheless there is of course every reason to reflect on whether the analysis that we carry out and the framework that we follow in our monetary policy work could be improved. That is the aim of the rest of my speech. Some thoughts on how to develop the Riksbank’s monetary policy work Methodological aspects Let me begin by addressing an issue that is of a rather technical or methodological nature, but that, as we also shall see, has a number of further consequences: the choice of repo rate on which the inflation forecast is based. Since 1996 the Riksbank’s Inflation Reports have presented overall assessments of the economy and inflation that have served as a guide for policy. From the fourth Report in 1997 these have included numerical, relatively detailed forecasts. The published forecasts have consistently been based on the assumption of an unchanged repo rate, above all because forecasts arrived at in that way make it easy to motivate changes in policy.
This is mainly because it is sometimes claimed in the general debate that the Riksbank and other inflationtargeting countries have bound themselves too tightly to a particular model and that a more “pragmatic” policy system would give better results. My conclusion is that our method of working is  BIS Review 11/2005  7  sufficiently flexible to manage the necessary balance. As I see it, there are major advantages to a system like ours, with a clear target, publication of the background data, a policy rule, etc. It provides our activities with stability, both at the staff level and in the Executive Board’s discussions and communications. We are also forced to systematically examine all new ideas and issues that arise against the framework we apply, which has proved an intellectually fruitful exercise. However, what I have tried to show here is that the methods we now use can sometimes enable us to produce more interesting data for monetary policy and to describe our considerations in a more pedagogical manner. They can make it easier to demonstrate the flexibility of the inflation-targeting regime we work with. Whether this will then have an impact on the monetary policy debate in Sweden, and ultimately on the policy conducted, is a very difficult question that only the future can answer.