It was during the days of religious conflicts in Dhaka, now the capital of Bangladesh. Ten year old Sen was playing in his garden, when a man named Kader Mia came through the gate, bleeding profusely. He had been knifed by some communal thugs while working in the neighborhood. Kader Mia unfolded his tale of woe to Sen and his family as he was rushed to the hospital. Despite his wife’s warning to Kader Mia not to venture into a hostile area in such troubled times, he had no choice but to seek work there to bring food home to his impoverished family. With the passing of Kader Mia, Sen learned from a very early age that economic “unfreedom”, as he termed it, in the form of extreme poverty, can make one a helpless prey in the violation of other kinds of freedom – including freedom from want, from fear and from discrimination. Sen argued that development requires the removal of major sources of “unfreedom”, one of them being poverty. In Kader Mia’s case, the price he had to pay for his economic “unfreedom” was death. This is why we are here – to do our part to help many, like Kader Mia, who remain shackled by their circumstances, achieve economic freedom.
Monetary policy in Norway is oriented towards low and stable inflation. This is the most important contribution monetary policy can make to sound economic developments in the long term. Low and stable inflation provides enterprises and households with an anchor for inflation expectations. In its conduct of monetary policy, Norges Bank operates a flexible inflation targeting regime, so that weight is given both to variability in inflation and variability in output and employment. Flexible inflation targeting builds a bridge between the long-term objective of monetary policy, which is to keep inflation on target and provide an anchor for inflation expectations, and the short-term objective of stabilising economic developments. Transparency surrounding Norges Bank’s assessments of monetary policy trade-offs enhances economic agents’ understanding of how economic news influences the interest rate. In recent years, it has become easier to read the Bank’s intentions. As a result, monetary policy has become more effective. The background material for the Executive Board’s monetary policy meetings is published and the assessments underlying the interest rate decisions are explained. As from last autumn, the Bank publishes its own interest rate forecast. From using technical assumptions and others’ assessments, we have taken ownership of the interest rate path in our projections. Even though  BIS Review 44/2006  1  considerable uncertainty still remains, it becomes easier for economic agents to assess interest rate developments. Weak growth in the world economy early this decade led to low interest rates in many countries.