Nevertheless, through our communication, we have sought to take account of the possibility that debt and asset price developments may be a potential source of subsequent instability, but it is neither our ambition nor our conviction that monetary policy can control developments in these variables. Moreover, we have stated in clear terms that the interest rate has been unusually low and that it would have to increase gradually to a more normal level. Since 2005, this has been reflected in our own interest rate forecast. Since inflation expectations have been firmly anchored, we have also been able to increase the interest rate gradually even though actual inflation has been below target. The time horizon for reaching the target in our forecasts has been stretched. Let me now turn to economic models and their use. Even though monetary policy cannot operate with objectives for developments in the labour market, asset prices or debt accumulation, these and other economic variables can provide information about future price developments, which is included in the basis for interest rate setting. In order to glean as much information as possible about future inflation and to gain insight into how the interest rate is affecting the economy, Norges Bank – like other central banks – uses economic models as an analytical tool. What makes a good model depends on the intended purpose of the model. The models' purpose must thus be given decisive weight in the choice and design of modelling tools.
Emerging Market Forum – Paris, 16 May 2022 Welcome remarks: “Multipolarity and the role of the euro in the International Financial System”  Speech by François Villeroy de Galhau, Governor of the Banque de France  Page 1 sur 7 Ladies and Gentlemen, It is a great pleasure to welcome you today in Banque de France premises for the 15th Emerging Markets Forum. “Navigating in a fast moving and turbulent world” certainly requires great skills, and recent developments in the International Financial System remind us that it is currently all but smooth sailing. We have seen disruption in the global value chains due to the still ongoing pandemic. International trade may slow down or even contract if these disruptions lead to a significant wave of re-shoring. Now the brutal war in Ukraine has induced further supply disruptions and led our democratic leaders to use financial sanctions in response. In this uncertain situation, our first duty as a central bank is to provide appropriate monetary policy. The consensus in our Governing Council is now clearly emerging, as summed up by Christine Lagarde in her speech last Wednesday i: to fight an inflation which is not only higher but broader, we now have to normalise our monetary policy. I won’t add my precise calendar prediction to the many existing ones, but expect a decisive June meeting, and an active summer.