Another problem with the inflation statistics at present is that the actual consumption pattern that has arisen during the crisis does not tally with the weights for different goods and services in the consumer price index. Or, put differently, Swedes have bought more toilet paper and fewer trips abroad than the weights in the consumer price index imply. At present, we do not know whether the changes in consumption patterns are temporary or permanent. If they are temporary, the actual consumption pattern will gradually move towards the consumption pattern represented by the weights in the consumer price index. If the changes in consumption patterns are permanent, it will be the weights in the consumer price index that move towards the actual consumption pattern. In Sweden, the weights are revised once a year on the basis of the consumption pattern a year or so earlier. 4 5  For further information see https://ec.europa.eu/eurostat/web/hicp/methodology. See Diewert & Fox (2020). 4 [6]  But regardless of whether the changes in the consumption pattern are temporary or not, the actual consumption pattern will deviate for a period of time from the consumption pattern represented by the weights in the consumer price index. This means that the development in the consumer price index will not agree for a period of time with the actual development in the cost of living. It is difficult to make predictions What do we actually know about the future? What can we use to say something about what will happen?
SPEECH DATE:  17 June 2020  SPEAKER:  Deputy Governor Henry Ohlsson  VENUE:  riksbank.se  SVERIGES RIKSBANK SE-103 37 Stockholm (Brunkebergstorg 11) Tel +46 8 787 00 00 Fax +46 8 21 05 31 registratorn@riksbank.se www.riksbank.se  Monetary policy during the economic crisis* The economic crisis the world economy is now experiencing is the deepest for many decades. Both demand and supply have declined substantially around the world. Economic policy faces major challenges. Sweden, which is a small open economy, has been severely affected by the reduced economic activity in the world around us. Naturally, we have also been affected by how international economic policy to deal with the crisis has been formulated. I will in this speech highlight three challenges that monetary policy has faced during the spring. These challenges have by no means disappeared, we will continue to deal with them. The first challenge has been that the financial markets function less smoothly during severe economic crises. This has been an important base for the Riksbank's monetary policy during the spring. Monetary policy aims to attain the inflation target. A second challenge at present is that the inflation statistics are difficult to interpret. For instance, there are no prices for many goods and services because there is quite simply no economic activity on these markets. Monetary policy must also be forward looking. Under normal circumstances this means that monetary policy is formulated according to forecasts of future economic developments.