Sources: The Riksbank, Ministry of Finance, National Institute for Economic Research and Statistics Sweden  As the figure shows, assessments of the level of equilibrium unemployment for the last four years (2008–2011) are relatively similar. The Ministry of Finance assumes that equilibrium unemployment will decrease strongly in the years ahead. The difference in the assessments is primarily because the National Institute of Economic Research and the Riksbank do not expect the economic policy to have such large effects on equilibrium unemployment. Good guidance for monetary policy? So serious attempts at calculating equilibrium unemployment have been made, but these have concluded in different assessments. Nevertheless, it is important that we try to gain an idea of equilibrium unemployment. Not least is this important in a time when reforms have been adopted that should (as most analysts agree) lead equilibrium unemployment to decrease. But I am extremely doubtful as to whether measures of equilibrium unemployment should be given too prominent a role in practical monetary policy. It seems simple in theory; but, in practice, it is not. Even if we could be more certain of the level of equilibrium unemployment further ahead, this would not give us such strong guidance for monetary policy decisions in the here and now. This can be illustrated by the following diagram.
Barbro Wickman-Parak: Monetary policy and unemployment – a constantly topical debate Speech by Ms Barbro Wickman-Parak, Deputy Governor of the Sveriges Riksbank, to the Swedish Trade Union Confederation (LO), Stockholm, 24 January 2012. *  *  *  I would like to thank Maria Sjödin and Magnus Wiberg, at the Monetary Policy Department of the Riksbank, for their help with writing this speech. High unemployment implies the failure of the welfare state. In Sweden, unemployment increased strongly in conjunction with the crisis of the 1990s, following which it has never fallen below 6 per cent. In this situation, it is important to use every means to improve conditions on the labour market and also to debate the role that could be played by monetary policy in the fight against unemployment. But it is equally important that this debate is realistic. From time to time, we have to remind ourselves that the possibilities monetary policy has in this area have their limits. This is primarily a matter of influencing the more short-term area of unemployment, which depends on economic activity, via effects on total demand in the economy. The area of unemployment that also exists in balanced economic cycles is harder to deal with. This unemployment is usually called long-term unemployment or equilibrium unemployment. The degree of equilibrium unemployment is highly dependent on how well the labour market is functioning, which is affected by policy areas other than monetary policy.