I will try to illuminate two questions: 1) Is our reaction pattern and the conditionality of our interest rate forecast understood? and 2) Do we affect the expectations of economic agents? [Chart: Decomposition of change in the interest rate path: Forecasts] Prior to the announcement of a new interest rate forecast, many of the market analysts publish their own forecast of our interest rate path. These forecasts are usually accompanied by a discussion of the factors pushing the expected revision of our path in either direction. Some analysts even publish their own assessment of our decomposition of the interest rate change, quantifying the estimated effects from different factors. The charts show the forecasts of the change in our interest rate path provided by three different macroanalysts prior to the publication of the October 2011 Monetary Policy Report. Our published change in the path and its decomposition are shown in the lower panel to the right. As shown in the chart, the forecasts are quite accurate, which is a typical pattern. We take this as an indication that market participants in general understand our reaction pattern. It also indicates that the agents correctly perceive our interest rate path as a conditional forecast, and not as an unconditional promise. [Chart: Changes in money market rates after monetary policy announcements] The next chart shows the changes in money market rates on the day of a new monetary policy announcement.
The Swedish economy has coped relatively well This is a general outline of the international picture. Although the world economy has begun to recover, there is no doubt that it is facing fairly major challenges over the coming years. But what is the situation here in Sweden? Well, in many ways things look rather good. The Swedish economy appears to have coped fairly well in the crisis. Although production fell more in Sweden than in many other countries, the recovery has been much quicker. The situation now looks much more stable than in most other places. One important reason why we have managed so well is, I believe, that it is not so long since we experienced a crisis here in Sweden – both in the bank system and the economy as a whole. The crisis at the beginning of the 1990s was much more isolated than the recent crisis and can in many ways be described as “home made”. But we nevertheless managed to learn some important lessons from it. Stable frameworks provide security… Perhaps the most important lesson is that both monetary policy and fiscal policy need stable long-term frameworks. The previous crisis therefore led to a number of changes in this direction, many of them through decisions made here in the Riksdag. Unlike the situation in the previous crisis, monetary policy is now conducted by an independent Riksbank with an inflation target.