the component that is not due to fluctuations in the demand for goods and services in the economy. And this requires completely different measures than those of monetary policy. In particular, it is a question of implementing measures that influence the functioning of the labour market. One indication that the employment problems we are seeing today are largely structural is the big differences in unemployment that exist between different regions and different occupational categories. (Chart 2.) Unemployment figures are twice as high in some regions as in others, and the percentage of people receiving benefit from their unemployment fund is twice as high in some occupational groups as in others. The fact that these differences remain over long periods, even when there is a shortage of skilled labour, suggests that the labour market doesn’t function as well as might be desired. The problems in the Swedish labour market are also underlined by the fact that open unemployment barely came down to 4 per cent when economic activity was at its strongest a couple of years ago. Target deviations and employment How the Riksbank works So, even though monetary policy cannot be expected to have any tangible impact on employment in the long term, short-term effects can arise. This is because a policy aimed at attaining the inflation target may entail changes in interest rates, which temporarily affect demand so that employment rises or falls.
So, although inflation is expected to be slightly higher than previously anticipated, our assessment is that it will be in line with the Riksbank’s target towards the end of the forecast period. Some questions One could say that the Inflation Report revolves around some questions, which I intend to touch upon briefly: •  One question is to what extent the high oil price will significantly hamper international economic activity. Although we, like most other forecasters, still assume that the oil price will fall again over the coming years, our assessment is that the price will be higher during the forecast period than we estimated in May. However, there are indications that the effects of the high oil price on growth will be relatively limited. For instance, the rise in the oil price appears to be largely a result of the fact that the world economy is expanding, although concern over terrorist acts and other factors also appears to have played a role. In addition, western world economies are today much less dependent on oil than they were in the 1970s, while monetary policy is now conducted in a way that makes it difficult for inflationary impulses from oil price rises to gain a foothold. Our current assessment is therefore that the high oil price will dampen, but not derail, the international economic upswing and that the effects on global inflation will be fairly modest. •  Another question is how inflation could be so low thus far this year, despite growth being relatively high.