Another issue which I have discussed in more detail in earlier speeches is that there is reason to fear that wage formation will not be able to cope with limitations set by the inflation target and productivity growth. How great, for instance, is the risk for the old pattern of wage spirals and increasing inflation being repeated? In this case, the Riksbank may be obliged to carry out a more stringent monetary policy to counteract growing inflationary pressure by subdued demand. My ambition is not to give any answers but rather to point out what we have to take notice of in future. Productivity development An important component of the analytical framework of monetary policy is accordingly to make forecasts of potential growth. The supply of labour and productivity growth are important determining factors for how much we can produce in the long term in our country. A higher potential rate of growth creates, as I said earlier, scope for greater demand without inflationary pressure arising. During the1950s and 1960s and until the beginning of the 1970s, the Swedish economy was characterised by very strong growth and very high productivity growth. Labour productivity grew from 1960-74 on average by as much as 4.3%. At the same time, inflation was low during these years. The gross investment ratio was high and a large part of Sweden’s incomes were invested during this period in expanding the productive capacity of the economy.
19 This was one of the reasons behind my reservation against the purchase decision in February 2015, see my comments at the monetary policy meeting (Riksbank 2015, p. 4-8 and 23-24). 9 [30]  Figure 6. The market already expected lower policy rates than the Riksbank Per cent  Note. Solid lines refers to outcomes. The red broken line refers to the market pricing just before the monetary policy meeting in February 2015, the blue broken line refers to the Riksbank's forecast in the Monetary Policy Report in February 2015. Source: The Riksbank. In Sweden, the signalling instead seems to have functioned in a completely different way. During 2013 and 2014, it became increasingly common for various agents in the Swedish debate to question whether the Riksbank placed sufficient emphasis on bringing inflation up to the 2 per cent target. But the combination of asset purchases and negative policy rate seemed very powerful. In 2015, the picture of the Riksbank's priorities therefore changed rapidly. There was no longer any doubt that the Riksbank was prepared to use all possible means to safeguard the credibility of the inflation target. It has probably been clear from my earlier statements that I have some doubts about whether the purchases of government bonds significantly stimulated the Swedish economy and thereby contributed to raising inflation. But I think this signalling effect was important, and more important than I realised when we started the purchases.