The development towards increasingly open central banks appears to be the same in other countries that work in similar ways, particularly in Norway where the Centre for Monetary Economics has  1  The National Institute of Economic Research (NIER) is a public authority under the Ministry of Finance. The NIER produces analyses and forecasts on the Swedish and international economies and conducts research in these fields. It has an independent position and is responsible for the assessments it makes. 4  BIS Review 25/2006  organised an annual, independent evaluation of monetary policy for the past few years. As I said at the beginning, this openness and the possibilities for evaluation are necessary conditions for an independent central bank to enjoy confidence and legitimacy. To summarise, I consider it extremely important that independent central banks should be assessed. To ensure that this is carried out in a purposeful manner, the central banks’ forecasts and other information on which decisions are based should be well-documented and reported openly. It also requires a reasonably coherent explanation as to why the forecasts look the way they do. This means that we need to constantly develop our methods for making and assessing forecasts. However, it also requires that an institution actively commits itself to making thorough analyses of the information compiled so that the assessments and debate can be serious and constructive. What happens if low inflation persists?
They do not usually base their forecasts on an unchanged interest rate. The new assumption makes it easier to assess the forecasts, as the conditions are normally more realistic. The fact that we have chosen to make this change can be partly regarded as a result of academic research, and also partly because this assumption appears to have worked well for other central banks that have chosen to base their forecasts on assumptions other than a constant key rate, such as Norges Bank and the Bank of England. Basis for assessment So much for our monetary policy strategy, which is what I believe we should be assessed against. Let me now say a few words about the basis we supply for assessment. The analysis work on which the monetary policy decisions are based is published in the form of Inflation Reports. These contain analyses of the determinants of inflation and forecasts for inflation developments over the coming years. They also contain analyses of why deviations from target have arisen or are expected to arise, given a particular monetary policy stance. The Inflation Reports thus contribute to spreading knowledge about the Riksbank’s assessments and thereby make it easier for external parties to follow and understand monetary policy. Moreover, we want them to encourage discussion of monetary policy issues. So far we have published four Inflation Reports a year, but we have now decided to reduce the number to three.