Along the way we have used three different assumptions for the policy rate – that it will remain unchanged, that it will develop according to market expectations, and, accordingly, that it will develop in the way we ourselves find most likely. Reasons why we want to present our own interest rate path Making its own forecast for the policy rate provides the central bank with a better tool for influencing expectations among households, companies and agents in the financial markets. In the cases where our view differs from the market view, we no longer need to take the rather circumstantial route via qualitative assessments of market pricing. Additionally, it becomes easier for us to show not only what we are thinking but also how we are thinking – it will be simpler to communicate how we view the driving forces behind economic developments and what monetary policy can achieve. If we succeed in communicating our view of how we think, then it will be easier for others to make good assessments on a continuous basis of how new information should affect the future development of the interest rate. This should reduce the fluctuations in the interest rate that are due to speculations regarding the Riksbank’s intentions. One aspect that may not have been given so much attention is that it has become simpler for households planning their private economy to form an impression of what the Executive Board considers to be a suitable development for the interest rate in the future.
All societies, whether open or closed, must find ways of ensuring that people are not excluded when technological progress makes old industries unprofitable. All societies also have a responsibility for production and consumption not having too great an impact on the environment since the welfare and health of future generations will otherwise be imperilled. We must be clear that development and collaboration are good. Almost everyone, including many of the poor in the world, has experienced great improvements in the past decades. In many respects, it is exactly the increased contacts and trade between countries that has contributed to it being possible to solve the problems that I have just mentioned. Growth in the industrialised countries has led to us being able to afford to conserve our environment, which most poor countries cannot afford to do. To reverse the trend - to attempt to isolate countries from one another - is not the way forward. Globalisation makes new demands I will now make some remarks on challanges specifically related to globalisation. Like all other development, globalisation is not without problems. These were clearly expressed in the severe economic crises that we have seen in recent years - in Mexico in 1994-95, in South-East Asia in 1997-98, in Russia in 1998 and in Brazil in 1999. These crises illustrate that increased trade and financial flows makes new demands public policy. Firstly, requirements increase on the national institutional settings - on laws, authorities and practices.