However, we now have new data on which to base our decisions and new opportunities for communicating them. Conclusion Let me try to summarise my message here. I believe that most people agree that inflation-targeting has worked well on the whole. We know that since inflation-targeting was introduced, Sweden has gone from being a high-inflation economy to an economy with low inflation and stable wage increases. The lower inflation rate has not led to weaker output growth; GDP growth has on average been higher under the new regime. It also appears that, if anything, the real stability of the economy has improved. Nevertheless, there is always good reason to consider how monetary policy can be developed and improved. To this end, I have discussed how the Riksbank’s monetary policy work can be developed. This has included what could be termed technical improvements; for instance, greater use of other assumptions than an unchanged repo rate and an extended forecast horizon when producing and presenting data. The advantage of using, for example, implied forward rates as a basis is that they can often be a more realistic assumption than an unchanged interest rate. This can in turn allow more and better alternative scenarios, which can illustrate different aspects of monetary policy including the consequences for inflation and resource utilisation over a longer time horizon. It has also included the Riksbank’s communication. Working with a longer time horizon provides a better overview of the effects of temporary influences on inflation.
If we start with the date that was set in the original decision – the beginning of 1995 – CPI inflation up to today has averaged 1.4 per cent. If we instead go back to January 1993, when the new policy was announced, the same figure is 1.7 per cent. If we focus on UND1X, the underlying measure that guided policy especially in recent years but also during a large part of the period 1996-1999, the corresponding figures are 1.8 and 2.0 per cent, respectively (see Figure 1). 2  BIS Review 11/2005  Whether this constitutes a good result or not is open to discussion, of course. Allow me here to simply say that when the target was adopted, and as an observer outside the Bank, I thought like many others that it would be very difficult to bring inflation down sustainably to a level around 2 per cent. What is particularly interesting in this context is that it has proved possible to establish a regime with a low inflation rate, close to the target, and to combine it with firm economic growth, which over these years has averaged almost 3 per cent a year, compared with about 2 per cent during the two previous decades. If anything, economic growth also appears to have become more stable since the inflation target was introduced.2 Another way to assess policy is to study whether we have acted in the way that we say we will, i.e. followed our policy rule.