Following on from this, the higher the potential growth rate, the faster the Swedish GDP can grow without putting the inflation target at risk. A natural starting point for calculating potential growth in the economy is the growth trend for productivity and the labour supply. Productivity growth has shown tendencies towards improvement during the 1990s. It is probable that factors such as the new low-inflation rate regime and greater openness with stiffer competition have played an important role in this development. However, it is far from certain that the high rates of increase at the end of the 1990s will continue. They mirrored both a rapid growth in the private sector relative to the public sector and a strong growth in the IT/telecom sector. Nevertheless, it is probable that the long-term increase in productivity is higher now than it was during the 1970s and 1980s. The number of hours worked has also developed relatively favourably since the mid-1990s. However, this development has largely depended on demand, influenced by the fact that there were considerable unutilised resources in the economy after the crisis at the beginning of the 1990s. With regard to the labour supply, there is less reason for optimism, partly because the demographic situation will be adverse in a few years' time, with more departures from the labour force relative to entries. Nor are there clear signs that economic policy has been organised to contributed to an increase in the labour supply in future.
•  Would it be necessary to promote a certain tactical flexibility in the conduct of monetary policy, so that central banks might carry out adjustments in terms of objectives as well, not only instrument-wise? Such an approach would diminish the predictability of monetary policy, but would allow, when need be, for financial stability considerations to prevail over the inflation objective. •  Is the reassessment of the desirable level of inflation suitable? How low is too low? The same as for capital inflows, we can ask ourselves in the case of price stability as well: how much of a good thing is too much? •  Will the policy instruments which have been resorted to in the context of the global crisis become an integral part of the new conventional framework? If macroprudential tools are here to stay, the future of non-conventional monetary policy instruments is less certain. Will the central banks keep using these instruments or will they abandon them at some point in time? I fully share the belief of the Governor of Banco de España Luis Linde (2013) that monetary policy – conventional or not – cannot solve the ultimate causes behind the loss in investors’ confidence or the tensions in financial or banking markets; in fact, its main role is to provide time to adopt the necessary measures to reform and/or adjust. 4  BIS central bankers’ speeches  •  How much room for trade-off among different goals is available?