Figure 9 Chile: Total export volume and price (annual change, percent) 60  60  45  45  30  30  15  15  0  0  -15  -15  -30  -30  99  00  01  02  Volume  03  04  05  06  07  08  Price  Source: Central Bank of Chile. BIS Review 41/2009  13  Figure 10  Economic perception  (diffusion indices, percent) Business confidence (1)  Consumer confidence (2)  70  140  120  60  60  120  100  50  50  100  80  40  40  80  60  30  30  60  40  20  20  40  20  10  07 Brazil Chile U.S. Japan  Jul. 08  China Mexico Eurozone  Jul. 09  07  S. Korea  Jul. Brazil China U.S. Mexico  08  Jul. 09  S. Korea Chile Japan Eurozone  (1) S. Korea is anchored in 100. (2) Series for Japan, the Eurozone and S. Korea anchored in 50. Other series, indices with base January 2007=100. For Chile, Adimark's IPEC and ICARE/Universidad Adolfo Ibañez indices. Sources: Adimark, Bloomberg and ICARE/Universidad Adolfo Ibañez. 14  BIS Review 41/2009
Should the repo rate be used to slow down this development to try to prevent prices becoming so high that the fall, when it actually  BIS Review 37/2005  3  comes, will be too fast and too far? There are many examples of how the air has gone out of asset markets and thereby triggered or aggravated a downswing in economic activity. Or is it more reasonable to wait until the “bubble” has burst and then try to counteract the effects the best one can? This question is neither a simple one nor a new one. It is discussed by central banks around the world, whether or not they have specific inflation targets. And there is hardly a clear-cut answer. As I see it, the seriousness we in Sweden should attach to households' increased debt burden is closely connected with how we assess price trends in the housing market. Although there has so far been a large rise in prices, particularly in metropolitan areas, we have not seen the clearly speculative tendencies apparent in other markets, for instance Australia and the United Kingdom. In Sweden we still usually buy housing to live in it ourselves. In some other countries, where the tax legislation and housing loan markets are different from in Sweden, people buy one or more additional properties in the hope that they will rise in value, rather like buying equity or other financial assets.